TRIS Rating Assigns “A” Rating to Senior Unsecured Debt Worth Up to THB3

TRIS Rating affirms the company rating on Minor International PLC (MINT) and the ratings on MINT?s existing senior unsecured debentures at ?A? and the ratings on MINT?s subordinated capital debentures (hybrid debentures, MINT22PA and MINT23PA) at ?BBB+?. The rating outlook is ?stable?. At the same time, we assign the rating of ?A? to MINT?s proposed issue of up to THB3 billion and an additional greenshoe portion of up to THB1 billion senior unsecured debentures. MINT intends to use the proceeds from the new debentures to refinance its debt coming due and to fund general business operations and expansion.

The ratings continue to reflect MINT's strong business profile, underpinned by its strong brand portfolio and wide geographic coverage in the hospitality and restaurant businesses. The ratings also factor in MINT?s improving financial profile, supported by steadily improving operating conditions post-pandemic. Persistently high inflation and global economic slowdown remain key concerns for the ratings.

MINT?s first quarter performance in 2023 was in line with our expectation. The hotel business continued to perform well with revenue per available room (RevPAR) surpassing pre-pandemic levels in most of its operating presences. MINT?s restaurant business also continuously improved, especially in China, following the lifting of all COVID-19-related restrictions. The company?s ability to raise its hotel room rates and cost initiatives applied since the time of pandemic helped mitigate the impact of persistently high inflation and pressure on operating costs. For the first three months of 2023, MINT reported THB31.9 billion in revenue, compared with THB20.1 billion in the same period last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) improved by a greater extent to THB6.8 billion, compared with THB2.9 billion in the same period last year. Adjusted debt to EBITDA ratio improved to 5.6 times (annualized based on trailing 12 months) for the first three months of 2023 from 6.4 times at the end of 2022.

RATING OUTLOOK

The ?stable? outlook reflects our expectation that MINT?s improving operating and financial performances will continue. We expect the company to manage its financial profile prudently, with adequate financial flexibility to serve as a cushion against the cyclical and volatile nature of the hotel industry and any adverse change of operating conditions.

RATING SENSITIVITIES

A rating upgrade could occur as MINT?s business and financial profiles continue to improve such that its adjusted debt to EBITDA ratio remains well below 5 times on a sustained basis. Conversely, a rating downgrade could materialize if MINT?s financial metrics are materially weaker than forecast either from adverse operating conditions or sizable debt-funded investments.

RELATED CRITERIA

- Corporate Rating Methodology, 15 July 2022

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

- Hybrid Securities Rating Criteria, 28 June 2021

- Issue Rating Criteria, 15 June 2021

Minor International PLC (MINT)

Company Rating: A

Issue Ratings:

MINT237A: THB3,059.00 million senior unsecured debentures due 2023 A

MINT243A: THB4,635.00 million senior unsecured debentures due 2024 A

MINT243B: THB2,165.00 million senior unsecured debentures due 2024 A

MINT247A: THB3,501.00 million senior unsecured debentures due 2024 A

MINT249A: THB1,000.00 million senior unsecured debentures due 2024 A

MINT255A: THB4,000.00 million senior unsecured debentures due 2025 A

MINT255B: THB2,769.03 million senior unsecured debentures due 2025 A

MINT257A: THB3,440.00 million senior unsecured debentures due 2025 A

MINT267A: THB2,000.00 million senior unsecured debentures due 2026 A

MINT277B: THB2,230.97 million senior unsecured debentures due 2027 A

MINT283A: THB1,000.00 million senior unsecured debentures due 2028 A

MINT293A: THB1,815.40 million senior unsecured debentures due 2029 A

MINT293B: THB5,684.60 million senior unsecured debentures due 2029 A

MINT313A: THB1,200.00 million senior unsecured debentures due 2031 A

MINT313B: THB1,570.00 million senior unsecured debentures due 2031 A

MINT313C: THB2,430.00 million senior unsecured debentures due 2031 A

MINT329A: THB1,000.00 million senior unsecured debentures due 2032 A

MINT343A: THB3,070.00 million senior unsecured debentures due 2034 A

MINT343B: THB2,430.00 million senior unsecured debentures due 2034 A

MINT22PA: THB13,000.00 million subordinated capital debentures BBB+

MINT23PA: THB10,500.00 million subordinated capital debentures BBB+

Up to THB3,000.00 million senior unsecured debentures and additional greenshoe portion of up to THB1,000 million due within 12 years A

Rating Outlook: Stable

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TRIS Rating Assigns “A” Rating to Senior Unsecured Debt Worth Up to THB3 Billion and Additional Greenshoe Portion Worth Up to THB1 Billion of “MINT”