Related Market Sector:
Fitch Ratings-Taipei/Singapore-19 January 2012: Fitch Ratings has assigned Taiwan's Fina Finance & Trading Co. Ltd. (Fina) a National Long-Term Rating of 'A-(twn)' and a National Short-Term Rating of 'F2(twn)'. The Outlook is Stable.
Fina's 'A-(twn)' rating is notched one level below its parent's (Chailease Finance Co. Ltd; rated 'BBB-'/'A(twn)'/Stable), reflecting the high level of linkages between the two. These linkages are underlined by Fina's integral role in the group's dominant franchise in Taiwan's leasing and instalment finance sector, Chailease's full ownership and management control, and moderately high level of integration in credit risk management.
Alignment of liquidity risk management between the two is constrained by Fina's restricted access to capital markets due to its small size and its refinancing risk arising from its reliance on bank funding. However, this is somewhat alleviated by strong implicit parent support and by Fina's resilient franchise, which allows it to fund itself without parent guarantees.
The Stable Outlook is underpinned by the parent's ongoing ordinary support and willingness to inject capital to fund Fina's growth (as evident in the recent recapitalisation in December 2011), given Fina's strategic importance within the group.
As with Chailease, upgrade of Fina is unlikely in the near- to medium-term as its parent's rating is constrained by its small size relative to global peers. Negative rating drivers would be material adverse changes of the linkages between the two, including ownership dilution, reduced strategic importance of Fina within the group and Fina's risk management system diverging from the group's.
Established in 1987 and fully owned by Chailease, Fina specialises in the instalment finance of construction machinery and equipment for Taiwanese SMEs, mainly in public infrastructure, with a market share of above 40% in 2011.
Contacts:
Primary Analyst
Cherry Huang, CFA
Director
+886 2 8175 7603
Fitch Ratings Limited
Suite 1306, 13F, 205, Tun Hwa N. Rd., Taipei
Secondary Analyst
Jenifer Chou
Associate Director
+886 2 8175 7605
Committee Chairperson
Mark Young
Managing Director
+65 6796 7229
Media Relations: Wai Lun Wan, Hong Kong, Tel: +852 2263 9935,
Email:
wailun.wan@fitchratings.com.
Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(twn)' for National ratings in Taiwan. Specific letter grades are not therefore internationally comparable.
Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 13 August 2011, 'Finance and Leasing Companies Criteria', dated 12 December 2011, and 'National Ratings Criteria', dated 19 January 2011, are available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Finance and Leasing Companies Criteria
National Ratings Criteria
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