Fitch affirms Mitsubishi Motors (Thailand)

Fitch Ratings said it affirmed the national long-term ratings of Mitsubishi Motors (Thailand) Co. Ltd.'s THB5 billion guaranteed debentures due 2008 and THB2 billion guaranteed debentures due 2009 at AAA(tha).

The outlook is stable.

The ratings are based entirely on the full, irrevocable and unconditional guarantee on the debentures by Bank of Tokyo-Mitsubishi UFJ of Japan (rated long-term foreign-currency issuer default A with positive outlook). As the Bank of Tokyo-Mitsubishi rating is at the same level as the Thai sovereign's, the guaranteed debentures are rated at the same level as Thailand's sovereign national rating of AAA(tha).

Fitch said any changes in the international rating differential between the bank and the Thai sovereign will affect the debentures' national rating. Investors should note that a one notch change in the differential between the international ratings of the bank and the Thai sovereign could result in a change of greater than one notch in the debentures' national rating, the agency said.

The rating of the bank reflects its existing franchise, improved asset quality and good capital levels, Fitch said. The rating also takes into account the bank's low underlying profitability compared with its overseas counterparts and its challenging operating environment against a background of weak loan demand and increasing competition, the agency said.

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