OREANDA-NEWS.  Fitch Ratings (Thailand) has affirmed the National Scale Money Market Fund Ratings on TMB Money Fund (TMBMF) and TMB Treasury Money Fund (TMBTM) at 'AAAmmf(tha)'. The money market funds are managed by TMB Asset Management Company Limited (TMBAM).

KEY RATING DRIVERS
The affirmations of the two funds are driven by the portfolios' overall credit quality and diversification, minimal exposure to interest rate and spread risks, high level of daily and weekly liquidity consistent with investor profiles and concentrations, and the capabilities and resources of TMBAM as investment manager.

Portfolio Credit Quality/Diversification

Consistent with Fitch's 'AAAmmf(tha)' criteria, TMBMF and TMBTM seek to maintain high credit quality by investing exclusively in short-term securities rated at least 'F1(tha)' by Fitch or of a comparable credit quality by other rating agencies. Over the last 12 months to 21 August 2015, TMBMF and TMBTM have maintained at least 79% and 98% respectively of their investment in 'F1+(tha)' securities. In line with the same criteria, the funds limit their exposure to individual issuers and counterparties.

TMBTM has an internal investment guideline of not investing in corporate securities while TMBMF limits its investment in corporate securities generally to 15% of the portfolio. TMBMF marginally exceeded this guideline once in January 2015, but this lasted for less than four weeks. The risk of TMBMF's exposure to corporate securities is also mitigated by the securities' high credit quality and short maturity.

Maturity Profile

The funds seek to limit interest rate and spread risk consistent with Fitch's 'AAAmmf(tha)' criteria. Each fund limits its weighted average maturity to reset date (WAM) to 60 days. The funds do not set a limit on weighted average life (WAL) but all of their investments are in fixed-rate securities resulting in the same WAM and WAL. As of 21 August 2015, TMBMF's and TMBTM's WAM were below 53 and 51 days, respectively. The maturity profiles of the funds' individual investments are consistent with Fitch's criteria, with the maturities of the non-government securities and fixed-rate government securities not exceeding the 397-day limit.

Liquidity Profile

The funds seek to manage investor redemption risks by maintaining sufficient levels of daily and weekly liquidity. In line with Fitch's criteria, TMBMF and TMBTM invest at least 10%-15% of their total assets in securities maturing overnight or other qualified assets and at least 25%-30% of total assets in securities maturing within seven business days or other assets that qualify as such. Both funds met these liquidity requirements over the past 12 months, reflecting their high levels of investments in short-term government securities. As of 21 August 2015, more than 88% of TMBTM's total assets were in assets classified as daily and weekly liquidity (including assets such as T-bills), while TMBMF had more than 73% in such investments.

Fund Objective

TMBMF's and TMBTM's investment objectives are to preserve principal and provide investors liquidity through limiting credit, market and liquidity risk. Both funds pursue their investment objectives by investing in high-quality short-term debt securities, including the Thai government debt securities, time deposits, bills of exchanges, promissory notes, and repos. As of 21 August 2015, TMBMF and TMBTM had THB7.0bn and THB15.7bn, respectively, in total assets under management (AUM).

Investment Manager

Established in 1996, TMBAM's major shareholder is TMB Bank Public Company Limited (A+(tha)/Stable/F1(tha)), Thailand's seventh-largest commercial bank, with a 87.5% stake. As of end-July 2015, TMBAM ranked seventh in Thailand's mutual-fund business with 62 funds representing THB233.3bn worth of AUM. Fitch notes that TMBAM has adequate compliance, monitoring, investment decision-making processes and fund support consistent with the funds' ratings.

RATING SENSITIVITIES

The rating may be sensitive to material changes in the credit quality or market risk profiles of the fund. A material adverse deviation from Fitch guidelines for any key rating drivers could lead to the rating being downgraded by Fitch. For additional information about Fitch's money market fund rating guidelines, please see the criteria referenced below.

To maintain the National Money Market Fund rating, Fitch seeks weekly fund and portfolio holdings information from TMBAM and conducts surveillance checks against its investment guidelines.