Fitch cuts MBK debentures to A-(tha)

Fitch Ratings said it downgraded MBK's long-term national rating to A-(tha) from A(tha) and short-term national rating to F2(tha) from F1(tha). Fitch also downgraded the long-term national rating of MBK's outstanding debentures to A-(tha) from A(tha). The outlook is stable.

Fitch said the downgrade mainly reflects MBK's increased risk appetite, evident in its higher exposure to non-core investments and non-recurring residential property development, which has increased financial leverage and risk exposure of the group.

MBK has been increasing its stake in National Finance plc, one of its major shareholders, to 9.68% at end-September 2004 from 2.5% at end-June 2003. This purchase, which was mainly debt financed, has raised its overall short-term investments to Thai baht 2.068 million from Thai baht 324 million over the same period, according to Fitch.

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