TRIS affirms credit ratings of Quality Houses, KTC
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TRIS Rating has affirmed the company and current senior debenture ratings of Quality Houses at "A-" and has assigned a rating of "A-" to QH's proposed issue of up to Bt3 billion in senior debentures.
The company will use the proceeds for debt repayment and business expansion.
TRIS Rating has revised QH’s outlook to “stable” from “negative” to reflect the company’s improving financial profile and lower concern on the recovery of sales in the flood-impacted projects as QH’s product platform diversity has become stronger.
QH’s ratings reflect the company’s established track record in the property development industry, strong position in the middle- to high-income housing market and financial flexibility from investments in marketable securities.
The strengths are partially offset by the cyclical nature of the property development industry, pressures from construction costs and labour shortage, and high financial leverage in the medium term.
The outlook revision to “stable” also reflects an expectation that the company’s business profile will remain strong in the medium term, with the debt-to-capitalisation ratio reducing gradually to stay at around 55 per cent.
TRIS Rating has also affirmed company & senior debt ratings of Krungthai Card (KTC) at “BBB+”, with “stable” outlook and assigns “BBB+” rating to new senior debt worth up to Bt12 billion.
The ratings reflect KTC’s well-established position in the credit card industry, the improvement in its asset quality, and the support it receives from its major shareholder, Krungthai Bank (KTB), which holds a 49.45 per cent stake in KTC.
The ratings are, however, constrained by KTC’s less competitive cost of funds, the increasingly competitive operating environment, and regulatory risk, which might affect the industry’s growth potential and profitability.
The “stable” outlook reflects the expectation that KTC will strive to maintain the efficiency of collections and maintain its strict underwriting criteria as it expands.
TRIS Rating also expects that KTB will continue to provide financial and business support to KTC.
