TRIS Rating Co., Ltd. has affirmed the rating of Seacon Development PLC's (SEACON) Bt550 million senior secured debentures (SCON061A) at "A-" with "stable" rating outlook. The rating reflects the company's recurring cash flow from contract-based rental and service income, its quality retail property, its healthy financial position, and the adequate collateral value of its shopping center. The debentureholders are adequately protected by a healthy loan to collateral value ratio of 12.2% as of March 2005, and the right to directly access the rental and service income from shopping center tenants in the event of default. However, the ratings also take into consideration the concentration risk of owning only one income-producing property, the illiquidity of the collateral, and intensified competition in the retail industry.
While the "stable" outlook reflects an expectation that SEACON will continue to maintain its shopping center operating performance. Its contract-based rental and service income will consistently provide a stable flow of cash to the company.
TRIS Rating reported that Seacon Square Shopping and Entertainment Center, operated by SEACON, had a gross area of 509,412 square meters (sq.m.), with 171,533 sq.m. of commercial area as of March 2005. The center is located in a good location on Srinakarin Road and has a strong, diversified tenant base including major anchors. The company also benefits from the high barrier to entry represented by the stricter planning regulations for new major retail developments. - End
Seacon Development PLC (SEACON) Issue Rating: SCON061A: Bt550 million senior secured debentures due 2006 A- Rating Outlook: Stable