dtac TriNet gains ‘AA+’ rating on proposed Bt5.5 bn debenture issue
TRIS Rating has assigned an “AA+” rating to the proposed issue of up to Bt5.5 billion in senior unsecured debentures of dtac TriNet Co Ltd (DTN), while affirming the company and outstanding senior unsecured debenture ratings of “AA+”, with a “negative” outlook.
TRIS said on Thursday that the new issue rating replaces the issue rating previously assigned on March 29 to a bond issue of up to Bt5 billion, following DTN’s request to increase the issue size to up to Bt5.5 billion. The proceeds from the new debentures will be used for debt repayment, investment, and working capital.
The ratings reflect DTN’s strategic importance as a core subsidiary of Total Access Communication Plc (DTAC; “AA+/negative”), the second-largest cellular phone service provider in Thailand by revenue. However, these strengths are partially offset by a highly competitive market, DTAC's weaker operating performance, and the large capital expenditures needed to expand the network nationwide, the ratings agency said.
The “negative” outlook reflects the change in outlook of DTAC. Over the medium term, TRIS Rating expects the competition in the wireless telecommunications market will remain intense and this will weigh on DTAC's financial profile.
DTAC’s financial profile is likely to weaken as a result of the lingering, competitive market and an expected rise in leverage as DTAC needs to acquire new spectrum and expand network coverage. Any change in DTAC’s credit rating will affect DTN's credit profile accordingly.
