Thailand Removed From Watchlist, Outlook Stable - S&p

Thailand removed from watchlist, outlook stable - S&P

BANGKOK: -- Standard and Poor's Ratings Services said it has removed Thailand from its watchlist following the September coup, reaffirming its ratings and saying the outlook is stable.

'The affirmation of the credit ratings on Thailand reflects Standard and Poor's view that the country's credit fundamentals remain supportive of its current ratings in the wake of the military coup,' S&P credit analyst Kim Eng Tan said.

In the days after the bloodless coup on September 19, S&P had warned that a failure to return to civilian rule could hurt the country's creditworthiness and affect the investment climate.

Today, the agency affirmed its BBB+/A-2 foreign currency and A/A-1 local currency sovereign credit ratings on Thailand and removed the kingdom from its watchlist.

The agency said the decision on the ratings was taken because security and policy risks in Thailand had dissipated because of the junta's promise to hold elections within one year.

'This is critical for the long-term social stability that is needed to create an environment conducive for a revival in corporate investment and stronger economic growth,' it said.

'A positive revision in the outlook or credit ratings could arise if a new government successfully implements decisive measures to deal with structural impediments to higher economic growth,' the agency said.

'Conversely, if widespread unrest breaks out during or after the political transition, a negative change to the sovereign credit ratings on Thailand is likely.'

-- XFN-ASIA 2006-10-31