TRIS Rating Assigns “A- Rating to Senior Unsecured Debt Worth Up to THB35 Billion of “GULF” with “Stable” Outlook

Stocks News Tuesday June 21, 2022 10:07 —TRIS News Release

TRIS Rating affirms the company rating on Gulf Energy Development PLC (GULF) at ?A? and the ratings on GULF?s senior unsecured debentures at ?A-?, with a ?stable? outlook. At the same time, we assign a rating of ?A-? to GULF?s proposed issue of up to THB35 billion senior unsecured debentures. The company intends to use the proceeds from the new debentures for business expansion and/or debt repayment.

The ratings reflect the company?s position as one of the leading power producers in Thailand, its well-diversified portfolio, its proven record of developing and operating power plants, and its highly predictable cash flows, backed by long-term power purchase agreements (PPA) with the Electricity Generating Authority of Thailand (EGAT, rated ?AAA? by TRIS Rating). In contrast, the ratings are constrained by risks associated with the company?s overseas expansion and the rise in its debt load.

GULF?s operating performance has been in line with our expectations. We forecast the company?s revenue and cash flows to rise steeply over the next three years, mainly driven by its two Independent Power Producer (IPP) power projects in Thailand, scheduled for operation during 2021-2024, plus the dividend income from its investment in a 42.25% stake in Intouch Holdings PLC (INTUCH). The increasing cash flows will likely help lower the ratio of debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) to about 6 times in 2024, from almost 10 times as of March 2022.

The issue ratings? single notch below the company rating reflects the subordination of the company?s senior unsecured debentures to its priority debt. As of March 2022, GULF?s consolidated debt was about THB234 billion, of which THB142 billion was considered priority debt, comprising secured debt owed by GULF and all borrowings incurred by its operating subsidiaries. As its priority debt to total debt ratio was 61%, exceeding the 50% threshold, we view GULF?s unsecured creditors as being significantly disadvantaged to the priority debt holders with respect to claims against the company?s assets.

RATING OUTLOOK

The ?stable? outlook reflects our expectations that GULF?s power plants in operation will run smoothly and generate cashflows as planned, while the plants under construction will commence operations as scheduled, and that the company?s growth strategy will not significantly weaken its financial profile from the current level.

RATING SENSITIVITIES

A rating upgrade could happen if GULF?s debt to EBITDA ratio improves and remains below 8 times on a sustained basis. In contrast, a rating downside could occur if the projects under development are materially delayed from schedule, significantly affecting projected cash flows. Any large debt-funded investment, that materially deteriorates the company?s financial profile, could also put downward pressure on the ratings.

RELATED CRITERIA

- Key Financial Ratio and Adjustments for Corporate Issuers, 11 January 2022

- Issue Rating Criteria, 15 June 2021

- Rating Methodology ? Corporate, 26 July 2019

Gulf Energy Development PLC (GULF)

Company Rating: A

Issue Ratings:

GULF238A: THB4,500 million senior unsecured debentures due 2023 A-

GULF241A: THB2,500 million senior unsecured debentures due 2024 A-

GULF249A: THB12,000 million senior unsecured debentures due 2024 A-

GULF252A: THB10,000 million senior unsecured debentures due 2025 A-

GULF258A: THB2,500 million senior unsecured debentures due 2025 A-

GULF261A: THB2,000 million senior unsecured debentures due 2026 A-

GULF269A: THB6,000 million senior unsecured debentures due 2026 A-

GULF272A: THB8,000 million senior unsecured debentures due 2027 A-

GULF278A: THB2,000 million senior unsecured debentures due 2027 A-

GULF289A: THB3,000 million senior unsecured debentures due 2028 A-

GULF291A: THB1,000 million senior unsecured debentures due 2029 A-

GULF292A: THB1,000 million senior unsecured debentures due 2029 A-

GULF308A: THB1,000 million senior unsecured debentures due 2030 A-

GULF319A: THB9,000 million senior unsecured debentures due 2031 A-

GULF322A: THB5,000 million senior unsecured debentures due 2032 A-

Up to THB35,000 million senior unsecured debentures due within 10 years A-

Rating Outlook: Stable

TRIS Rating Co., Ltd./www.trisrating.com
Contact: santaya@trisrating.com, Tel: +66 0 2 098 3000/Silom Complex Building, 24th Floor, 191 Silom Road, Bangkok 10500, Thailand
? Copyright 2022, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution, or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited, without the prior written permission of TRIS Rating Co., Ltd. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient?s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information. All methodologies used can be found at www.trisrating.com/rating-information/rating-criteria

เว็บไซต์นี้มีการใช้งานคุกกี้ ศึกษารายละเอียดเพิ่มเติมได้ที่ นโยบายความเป็นส่วนตัว และ ข้อตกลงการใช้บริการ รับทราบ