TRIS Rating Co., Ltd. has affirmed the company rating of N.C. Housing PLC (NCH) at "BBB". At the same time, TRIS rating has assigned the ratings of NCH's two proposed senior secured debentures totaling Bt800 million at "BBB+". The rating outlook remains "stable". The ratings reflect NCH's track record in the middle- to low-income housing market, its recognized "Baan Pha" brand name and its acceptable financial leverage. These strengths are partially offset by slowing demand growth and the cyclical nature of the real estate industry. The issue ratings also take into consideration the land pledged as collateral which has appraisal value at two times of the outstanding debentures.
While the "stable" outlook reflects the expectation that NCH will be able to maintain its performance at an acceptable level, even though the property market is slowing down. The company is expected to maintain its target leverage of one time in the medium term.
TRIS Rating reported that NCH is a medium-size housing developer, focusing on the middle- to low-income housing market. The "Baan Pha" brand has become well known in the northern zone of the Bangkok Metropolitan Area (BMA). NCH's performance during the past few years has been satisfactory. In 2004, NCH earned Bt2,541 million in total revenue, up slightly from Bt2,412 million in 2003. The company's current profitability is moderate when compared with its peers. Its gross margin was 31.9% for 2004, improved from 26.6% in 2003.
TRIS Rating anticipates that competition in the housing market in 2005 is expected to intensify. Rising interest rates, oil prices, and construction costs have adversely affected real estate demand and operators' margins. -- End
N.C. Housing PLC (NCH) Company Rating: Affirmed at BBB Issue Ratings: Up to Bt800 million senior secured debentures: - NCH#1/2005: senior secured debentures, tranche 1 due 2008 BBB+ - NCH#2/2005: senior secured debentures, tranche 2 due 2008 BBB+ Rating Outlook: Stable
While the "stable" outlook reflects the expectation that NCH will be able to maintain its performance at an acceptable level, even though the property market is slowing down. The company is expected to maintain its target leverage of one time in the medium term.
TRIS Rating reported that NCH is a medium-size housing developer, focusing on the middle- to low-income housing market. The "Baan Pha" brand has become well known in the northern zone of the Bangkok Metropolitan Area (BMA). NCH's performance during the past few years has been satisfactory. In 2004, NCH earned Bt2,541 million in total revenue, up slightly from Bt2,412 million in 2003. The company's current profitability is moderate when compared with its peers. Its gross margin was 31.9% for 2004, improved from 26.6% in 2003.
TRIS Rating anticipates that competition in the housing market in 2005 is expected to intensify. Rising interest rates, oil prices, and construction costs have adversely affected real estate demand and operators' margins. -- End
N.C. Housing PLC (NCH) Company Rating: Affirmed at BBB Issue Ratings: Up to Bt800 million senior secured debentures: - NCH#1/2005: senior secured debentures, tranche 1 due 2008 BBB+ - NCH#2/2005: senior secured debentures, tranche 2 due 2008 BBB+ Rating Outlook: Stable