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BULLETIN: Chung Hsing Bills Finance Ratings Not Affected By Proposed Capital Reduction

 
2005/03/30



Analyst Steven Chen
Serene Hsieh, CPA

Taiwan Ratings said today that its ratings on Chung Hsing Bills Finance Co. Ltd. (Chung Hsing BFC, twAA/Stable/twA-1) would not be immediately affected by yesterday's announcement that the company plans to reduce its capital base by NT$5 billion. The company's capitalization is expected to remain sufficient relative to its risk profile, though moderated, after the capital reduction and commensurate with the current ratings, which are further underpinned by implicit support from its parent company, Mega Financial Holding Co. Ltd. (Mega FHC, twAA/Stable/twA-1). Chung Hsing's paid-in capital and total shareholders' funds will fall to about NT$20.1 billion and NT$32.2 billion, respectively, after the capital reduction, based on data for the end of 2004. The execution of the capital reduction plan is subject to the approval of the regulator.

Analytic services provided by Taiwan Ratings Corporation (TRC) are the result of separate activities designed to preserve the independence and objectivity of ratings opinions. The credit ratings and observations contained herein are solely statements of opinion and not statements of fact or recommendations to purchase, hold, or sell any securities or make any other investment decisions. Accordingly, any user of the information contained herein should not rely on any credit rating or other opinion contained herein in making any investment decision. Ratings are based on information received by TRC. TRC has established policies and procedures to maintain the confidentiality of non-public information received during the ratings process.

 



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