Standard & Poor's buys stake in TRIS Rating's parent

Economy November 30, 2011 00:00

By Seetalavajit Sabayjai
The Nat

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Standard & Poor's Ratings Services has acquired a 5-per-cent stake in TRIS Corp, the parent company of Thailand's leading credit agency, TRIS Rating, from the Asian Development Bank in a move aimed at strengthening S&P's Asean network.



 

 
The move comes after S&P’s recent collaboration with RAM Holdings, the leading rating agency in Malaysia. Other collaboration in Asia extends from Indonesia, mainland China and India to Taiwan. 
The global agency also has a long relationship with TRIS by providing the latter with know-how for the first three years after its establishment.
“We are going to strengthen our product offerings to serve global investors,” said Surinder D Kathpalia, managing director and Asean head at S&P. 
Thailand’s bond market is the second-largest in Asean, slightly behind the Malaysian market.
After the acquisition, the Asian Development Bank (ADB), which helped develop the Thai capital markets and TRIS Rating in the initial stage, no longer has a holding in the Thai rating agency. 
“The ADB shared its stake in TRIS since the beginning in 1993 to help develop the credit-rating industry in Thailand,” said Robert van Zwieten, director of the ADB’s private-sector operations department.
Such a network of credit-rating agencies will help serve investors by providing them with insights on the global, Asean and local scales, Kathpalia said. 
S&P and TRIS will collaborate on joint research projects, business development, sharing of credit-rating expertise and experience, and training. 
S&P will provide global expertise and knowledge such as structure finance, while TRIS will share local knowledge, skills and capabilities, he said. 
Currently, TRIS Rating has one credit-rating case for structure finance. “There is more room for this kind [of product],” TRIS president Santi Kiranand said, adding that foreign investors could see more linkage of information, which could boost confidence in the Thai bond market.
The local bond market is expected to continue growing with more issuers next year, he said. Currently, TRIS Rating has about 65 per cent of total bond issues in the Kingdom, with 111 clients. 
The Thai market has now reached a level of maturity and credit-rating agencies could help boost transparency and give investors access to bond-issue information, Kathpalia said, adding that this could enhance the capability of the Thai capital markets. 
 
TRIS shareholding structure
Shareholder/% holding

Government Savings Bank /  13.52

Finance Ministry  /     5

Standard & Poor’s   /     5

Commercial banks  /           45.33

The Stock Exchange of Thailand  /  13.34

Finance and securities companies  /  7.81

Fund companies      /       5

Insurance companies:          /       5

Source: TRIS Corporation