TRIS Rating Downgrades Company Rating on “MIDA” to “BB ” from “BBB-” And

TRIS Rating downgrades the company rating on Mida Assets PLC (MIDA) to “BB+” from “BBB-” and places the rating on CreditAlert with “negative” implication. The rating actions reflect our concerns over the heightened refinancing risk of the company’s maturing bonds amid the liquidity crunch in the bond market and its limited ability to secure other funding sources. The operating performance of its hotels and property-related businesses, which account for almost 50% of its revenues, is expected to drop sharply as a result of the unprecedented impacts of the coronavirus (COVID-19) outbreak. However, its leasing business is as yet unaffected by the virus pandemic.

At the end of December 2019, MIDA’s reported total debt stood at Bt4.9 billion. Its reported debt to equity ratio was 0.96 times, significantly lower than its covenant on bond of 2 times. Debt due in 2020 amounts to Bt2.28 billion, comprising Bt0.29 billion in short-term borrowings, Bt0.34 billion in long-term loans, and Bt1.62 billion in debentures.

At the end of March 2020, MIDA’s outstanding bonds due for the rest of 2020 comprised Bt612.4 million due on 24 April 2020, Bt160 million due on 27 September 2020, and Bt770 million due on 15 November 2020. MIDA’s plan to refinance its bonds with a new bond issuance looks highly unlikely to materialize in the near term, as the fear of the economic fallout from the virus outbreak has turned off investors’ risk appetite. In the event that the company fails to rollover the maturing bonds and has no other sources of funds, the company’s credit rating could be downgraded further by multiple notches.

RELATED CRITERIA

- Rating Methodology – Corporate, 26 July 2019

- Key Financial Ratios and Adjustments, 5 September 2018

- Nonbank Lending Company, 7 May 2018

- Group Rating Methodology, 10 July 2015

Mida Assets PLC (MIDA)

Company Rating: BB+

CreditAlert: Negative

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TRIS Rating Downgrades Company Rating on “MIDA” to “BB+” from “BBB-” And Places the Rating on “Negative” CreditAlert