TRIS Rating Co., Ltd. has affirmed the company rating of Quality Houses PLC (QH) at "BBB+". At the same time, TRIS Rating has also assigned the ratings of all QH's existing (QH064A, QH074A, QH084A, QH09DA) and proposed up to Bt3,000 million senior debentures at "BBB+". The rating outlook remains "stable". The ratings reflect the company's long track record in the property market, its strong brand name in the high-income housing market and recurring income from its serviced apartments and office buildings. These strengths are partly offset by the company's highly-leveraged balance sheet and the cyclical nature of the property development market. Increasing industry risk from rising interest rates, and rising construction material costs are concerns.
The "stable" outlook reflects an expectation that QH will be able to maintain its leading position in the luxury housing market. Recurring income from its serviced apartments and office buildings is expected to increase after the completion of its new office project, the QH Lumpini, in early 2006. The company is expected to lower its debt-to-capitalization ratio to less than 50% in the medium term.
TRIS Rating reported that QH's performance for the first three months of 2005 was satisfactory. Though the overall housing market is less favorable, the company's luxury housing sales of Bt1,533 million for the first three months of 2005 was higher than the same period last year. Recurring income from its serviced apartments and offices rentals increased by 24% due to the opening of new apartments in early 2004. Increasing amount of rental income from serviced apartments and office rentals is beneficial as it is less affected by housing industry cycles.
TRIS Rating said that competition in the housing market in 2005 is expected to intensify as there are more housing units offered to the market at a time when demand is expected to slow down, compared with last year. Increasing construction material prices, together with rising interest rates, will put more pressure on developers' margins. The Bank of Thailand's regulations to control down payments for high priced housing market and stricter reporting requirements for pre-financing loans may reduce new supply in the residential market. -- End
Quality Houses PLC (QH) Company Rating: BBB+ Issue Ratings: QH064A: Bt584 million senior debentures due 2006 BBB+ QH074A: Bt917 million senior debentures due 2007 BBB+ QH084A: Bt499 million senior debentures due 2008 BBB+ QH09DA: Bt1,000 million senior debentures due 2009 BBB+ Up to Bt3,000 million senior debentures
- QH#1/2005: senior debentures due 2008 BBB+
- QH#2/2005: senior debentures due 2009 BBB+
- QH#3/2005: senior debentures due 2010 BBB+ Rating Outlook: Stable
The "stable" outlook reflects an expectation that QH will be able to maintain its leading position in the luxury housing market. Recurring income from its serviced apartments and office buildings is expected to increase after the completion of its new office project, the QH Lumpini, in early 2006. The company is expected to lower its debt-to-capitalization ratio to less than 50% in the medium term.
TRIS Rating reported that QH's performance for the first three months of 2005 was satisfactory. Though the overall housing market is less favorable, the company's luxury housing sales of Bt1,533 million for the first three months of 2005 was higher than the same period last year. Recurring income from its serviced apartments and offices rentals increased by 24% due to the opening of new apartments in early 2004. Increasing amount of rental income from serviced apartments and office rentals is beneficial as it is less affected by housing industry cycles.
TRIS Rating said that competition in the housing market in 2005 is expected to intensify as there are more housing units offered to the market at a time when demand is expected to slow down, compared with last year. Increasing construction material prices, together with rising interest rates, will put more pressure on developers' margins. The Bank of Thailand's regulations to control down payments for high priced housing market and stricter reporting requirements for pre-financing loans may reduce new supply in the residential market. -- End
Quality Houses PLC (QH) Company Rating: BBB+ Issue Ratings: QH064A: Bt584 million senior debentures due 2006 BBB+ QH074A: Bt917 million senior debentures due 2007 BBB+ QH084A: Bt499 million senior debentures due 2008 BBB+ QH09DA: Bt1,000 million senior debentures due 2009 BBB+ Up to Bt3,000 million senior debentures
- QH#1/2005: senior debentures due 2008 BBB+
- QH#2/2005: senior debentures due 2009 BBB+
- QH#3/2005: senior debentures due 2010 BBB+ Rating Outlook: Stable