In order to coordinate the loan assurance on the joint investment in Formosa Ha Tinh Steel Corp. (FHS) with Formosa Plastic Corp. (FPC) group, the Company accepts the suggestion of the finance division of FPC group to adopt Taiwan Ratings' credit ratings from 2014 so as to strengthen the effectiveness of endorsement assurance.
Based on our presentation and the interview with the Company's senior executives at our Taipei branch on September 19, 2017, Taiwan Ratings gives the following corporate credit ratings for four consecutive years.
Long-term credit rating
Short-term credit rating
Explanation of 2017 corporate credit ratings:
'twA+' long-term and 'twA-1' short-term corporate credit ratings are affirmed by Taiwan Ratings because it thinks:
FTC will maintain its moderately strategic status within the Formosa Plastics Corp. group over the next two years.
FTC will maintain its intermediate debt leverage and good market position in high-end functional woven fabrics underpinned by the company's well-established long-term relationships with its key customers.
FTC is equipped with good technology capabilities and low cost overseas capacity in Vietnam and China.
The reason FTC's outlook is rated as stable is that Taiwan Ratings believes
FTC will sustain its competitive advantage and business diversification, while maintaining a debt to EBITDA ratio of 2.5x-3x over the next one to two years.
FTC's relationship with the Formosa Plastics group will remain unchanged over the period.