OREANDA-NEWS. Fitch Ratings (Thailand) Limited has affirmed Mercedes-Benz (Thailand) Limited's (MBTh) medium-term debenture programme of up to THB15bn at National Long-Term Rating of 'AAA(tha)'. The Outlook is Stable. At the same time the agency has affirmed MBTh's existing THB8.52bn guaranteed debentures under the previous and this MTN programmes at 'AAA(tha)' with Stable Outlook. The debentures under the MTN programmes are guaranteed by MBTh's parent, Daimler AG (Daimler; A-/Stable).

KEY RATING DRIVERS

Guaranteed by Daimler: The ratings of the MTN programmes are based solely on the full, irrevocable and unconditional guarantee provided by Daimler. Daimler's Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'A-' is higher than Thailand's Long-Term Local-Currency IDR of 'BBB+'. As a result, the National Rating on the guaranteed medium-term debenture programmes are capped at Thailand's National rating of 'AAA(tha)'.

Strong Relationship with Daimler: MBTh is 99.99% owned by Daimler, with which it has strong operational and financial links. MBTh imports both completely built-up vehicles and completely knocked-down kits from Daimler for local assembly and distribution. MBTh is also closely monitored by Daimler's regional treasury centre and strictly implements the group's treasury policy.

Luxury Car Leader: MBTh is one of the leaders in Thailand's premium-car market, with a market share that has improved to about 50% in 2015 in terms of unit sales. The company also provides hire-purchase and leasing services through its wholly owned leasing subsidiary, Mercedes-Benz Leasing (Thailand) Company Limited (MBLT).

RATING SENSITIVITIES

Negative: Future developments that may, individually or collectively, lead to negative rating action include

- The guaranteed MTNs could be downgraded if Daimler's Long-Term Foreign-Currency IDR falls below Thailand's Long-Term Local-Currency IDR.

Positive: The rating of MBTh's guaranteed MTNs are at the highest end of the National Rating scale, therefore there is no potential rating upside.