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TRIS Rating Co., Ltd. has assigned a "BBB+" rating to Bt1,250 million senior secured debentures of Destination Properties (Hua Hin) Co., Ltd. (DP (Hua Hin)), formerly known as Siam Hotel Properties (Hua Hin) Co., Ltd. (SHP (Hua Hin)).
TRIS Rating said that the rating of DP (Hua Hin)'s senior secured debentures reflects: the excess value of the collateral over the outstanding balance throughout the periods of the debentures, for which the beginning loan-to-value (LTV) ratio stands at 59.6% and the ending LTV is projected at 33.4%; the ability of the underlining property, Hilton Hua Hin Resort & Spa, based on its stabilized cash flow estimated in 2004, to generate sufficient cash flow at the stressed debt service coverage ratio (DSCR) of 1.16 times (excluding cash available in reserve accounts); and the additional security elements, including, but not limited to, the pledge of all units of Siam Hotel Property Fund that are embedded into the transaction structure itself to protect debentureholders.
TRIS Rating also said that the sustainable cash flow of DP (Hua Hin) is estimated at Bt168 million compared with earnings before interest, tax, depreciation and amortization (EBITDA) range of Bt78-Bt182 million during 2001-2004. The method used to calculate sustainable cash flow is based on the property's current ability, after taking into account its upside and downside potential. In TRIS Rating's view, the hotel industry in Hua Hin was not yet stabilized, hence, the sustainable cash flow may be revised, subject to the property and industry's performance in the future. -- End
Destination Properties (Hua Hin) Co., Ltd. (DP (Hua Hin)) Issue Rating: Bt1,250 million senior secured debentures due 2009 BBB+
TRIS Rating said that the rating of DP (Hua Hin)'s senior secured debentures reflects: the excess value of the collateral over the outstanding balance throughout the periods of the debentures, for which the beginning loan-to-value (LTV) ratio stands at 59.6% and the ending LTV is projected at 33.4%; the ability of the underlining property, Hilton Hua Hin Resort & Spa, based on its stabilized cash flow estimated in 2004, to generate sufficient cash flow at the stressed debt service coverage ratio (DSCR) of 1.16 times (excluding cash available in reserve accounts); and the additional security elements, including, but not limited to, the pledge of all units of Siam Hotel Property Fund that are embedded into the transaction structure itself to protect debentureholders.
TRIS Rating also said that the sustainable cash flow of DP (Hua Hin) is estimated at Bt168 million compared with earnings before interest, tax, depreciation and amortization (EBITDA) range of Bt78-Bt182 million during 2001-2004. The method used to calculate sustainable cash flow is based on the property's current ability, after taking into account its upside and downside potential. In TRIS Rating's view, the hotel industry in Hua Hin was not yet stabilized, hence, the sustainable cash flow may be revised, subject to the property and industry's performance in the future. -- End
Destination Properties (Hua Hin) Co., Ltd. (DP (Hua Hin)) Issue Rating: Bt1,250 million senior secured debentures due 2009 BBB+