TRIS Rating Co., Ltd. has affirmed the company and issue ratings of Royal Garden Resort PLC (RGR) at "A-" and has assigned the rating of RGR's proposed Bt500 million senior debentures at "A-". These new debentures have a term of two years, 11 months and 24 days, with fixed semiannual coupon payments and a bullet principal repayment. The ratings continue to reflect the extensive experience and long-term proven management record of both RGR and The Minor Food Group PLC (MFG). The ratings also take into consideration RGR's diversified hotel portfolio and MFG's leading position in the growing fast food industry. However, these factors are partially offset by the seasonal and cyclical nature of the hotel industry, which is highly sensitive to external factors, and the highly competitive fast food industry.
TRIS Rating has also affirmed the "stable" rating outlook to RGR. The outlook is based on the expectation that RGR's cash flow generation will remain strong; however, financial leverage of the company is likely to remain high in the intermediate term as its internal cash generation is not sufficient to fund its expansion in the second half of 2004. Assuming that internal cash flow generation continues to improve, the company has to show material improvement in its financial leverage before a change to its outlook or rating would be considered.
TRIS Rating said that RGR will use all Bt500 million from the proposed debentures for refinancing parts of the bridging loan that was used to fund the acquisition of Royal Garden Development Co., Ltd. (RGD) through RGR International Co., Ltd. in October 2004. RGD is the owner of JW Marriott Phuket Resort and Spa. After the acquisition, RGR group directly and indirectly holds 86.5% of RGD. RGD has shown strong operating performance after opening in late 2001. Its revenue per available room (RevPAR) increased from Bt1,907 in 2002 to Bt2,708 in 2003 and Bt3,401 during the first nine months of 2004, TRIS Rating said. -- End
Royal Garden Resort PLC (RGR) Company Rating: Affirmed at A- Issue Ratings: RGR078A: Bt1,700 million senior debentures due 2007 Affirmed at A- RGR10DA: Bt1,000 million senior debentures due 2010 Affirmed at A- Bt500 million senior debentures due 2007 A- Rating Outlook: Stable
TRIS Rating has also affirmed the "stable" rating outlook to RGR. The outlook is based on the expectation that RGR's cash flow generation will remain strong; however, financial leverage of the company is likely to remain high in the intermediate term as its internal cash generation is not sufficient to fund its expansion in the second half of 2004. Assuming that internal cash flow generation continues to improve, the company has to show material improvement in its financial leverage before a change to its outlook or rating would be considered.
TRIS Rating said that RGR will use all Bt500 million from the proposed debentures for refinancing parts of the bridging loan that was used to fund the acquisition of Royal Garden Development Co., Ltd. (RGD) through RGR International Co., Ltd. in October 2004. RGD is the owner of JW Marriott Phuket Resort and Spa. After the acquisition, RGR group directly and indirectly holds 86.5% of RGD. RGD has shown strong operating performance after opening in late 2001. Its revenue per available room (RevPAR) increased from Bt1,907 in 2002 to Bt2,708 in 2003 and Bt3,401 during the first nine months of 2004, TRIS Rating said. -- End
Royal Garden Resort PLC (RGR) Company Rating: Affirmed at A- Issue Ratings: RGR078A: Bt1,700 million senior debentures due 2007 Affirmed at A- RGR10DA: Bt1,000 million senior debentures due 2010 Affirmed at A- Bt500 million senior debentures due 2007 A- Rating Outlook: Stable