RATCH

Moody's Investors Service has upgraded to 
(P)Baa1 from (P)Baa2 the provisional rating on the medium term note 
program of RH International (Singapore) Corporation Pte. Ltd (RHIS) and 
Ratchaburi Electricity Generating Holding PCL (Ratch). Ratch is the 
holding company of the Ratch group and RHIS is a wholly-owned subsidiary 
of Ratch. Moody's has also upgraded to Baa1 from Baa2 the senior 
unsecured rating on the US$ notes issued by RHIS and guaranteed by Ratch.

At the same time, Moody's has assigned a Baa1 issuer rating to Ratch, 
followed by a withdrawal of the company's corporate family rating.

The outlook on all ratings is stable.

RATINGS RATIONALE

"The upgrade in the senior unsecured ratings reflects the manageable 
structural subordination risk, given 1) the increased diversity of 
Ratch's subsidiaries and joint venture investments, which have 
independent and non-recourse financing, 2) Ratch's plans to raise more 
debt at the holding company and/or RHIS level, thereby decreasing the 
overall concentration of priority debt over time, and 3) the fair 
recovery expectation for the creditors through Ratch's major operating 
subsidiary (namely Ratchaburi Electricity Generating Company Ltd, or 
RatchGen,), which is conservatively leveraged, " says Ivy Poon, a Moody's 
Assistant Vice President and Analyst.

"Because of these factors, the senior unsecured ratings are no longer 
notched down, although structural subordination remains a risk for the 
rating", Poon adds.

The Baa1 issuer rating reflects Ratch's strong market position underpinned 
by robust power purchase agreements and close linkage with Electricity
Generating Authority of Thailand (unrated), which is ultimately wholly 
owned by the government of Thailand (Baa1 stable). The rating also 
considers Ratch's moderate financial profile and solid project execution 
capability. However, the rating reflects Ratch's exposure to joint 
venture projects - particularly those in less developed countries such as 
the large Hongsa project, which is located in Laos (unrated) - as well as 
the evolving regulation in the sector.

Ratch has a complex group structure with multiple layers of intermediate
holding companies, subsidiaries, joint ventures and associates. The 
financing of its power projects is usually arranged at the project
company level, as the subsidiaries and JVs that hold power plants or 
projects are capable of arranging their own financing.

Creditors of Ratch, which has a holding company structure and guarantees
the obligations of RHIS, are structurally subordinated to creditors of 
the operating companies and JVs as the latter have first claims over the 
operating assets and cash flow.

However, such structural subordination risk is mitigated by the factors 
mentioned above, including the fair recovery expectations for the holding 
company creditors over the assets and cash flow generated by Ratch's key 
operating company, RatchGen.

RatchGen accounts for over 80% of consolidated EBITDA and around 50% of 
consolidated assets, but has a relatively low level of debt. Furthermore, 
Moody's expects RatchGen to gradually de-leverage in the near-to-medium 
term, consistent with management's plans. The low and reducing level of 
debt increases the recovery prospects for Ratch's creditors after 
RatchGen serves its claims in the event of liquidation.

Additionally, Ratch's power projects are financed separately, with no 
recourse to the holding company or cross-defaults to the holding company 
or other operating companies. Ratch structurally benefits from the 
diversity of its power projects.

Moody's assessment of Ratch's credit profile takes into account Ratch's 
moral obligation to support the Hongsa Project (ultimately owned 40% by 
Ratch), which is by far the company's largest investment outside of 
Thailand . The project carries sizable JV debt that Moody's expects to 
peak at THB37.5 billion in 2015 and which Moody's accounts for on a 
pro-rata basis, when measuring Ratch's leverage.

The Baa1 issuer rating incorporates a one-notch uplift based on the high 
level of support expected from EGAT, which owns 45% of Ratch, and which 
has an overall credit profile that is stronger than Ratch's.

Moody's expects the company's projected credit metrics to remain 
appropriate for its Baa1 rating over the next two to three years. Under 
Moody's base case scenario, projected funds from operations (FFO) 
interest coverage will measure 3.5x-4.5x and projected FFO/ debt 
15%-20%, which are within the rating tolerance.

The stable outlook reflects Moody's expectation that there will be no
material adverse changes in the regulatory environment for Thailand's
electricity market in the near to medium term. The stable outlook is 
also consistent with the rating of the sovereign, which is the 100% owner 
of EGAT, Ratch's largest shareholder .

Upgrade momentum in the rating would emerge if there is a permanent 
deleveraging. Ratios that Moody's would look for include adjusted 
FFO/debt increasing above 20% and FFO/Interest staying above 4.5x (both 
based on pro-rata consolidation of JVs) on a consistent basis.

The rating could be downgraded if Ratch's credit strength deteriorates
substantially, which could be due to aggressive debt-funded investments 
or a material increase in its business risk profile, likely due to 
overseas expansions or to material increase in regulatory risk.

The key metrics that Moody's would consider for a downgrade include
adjusted FFO/interest coverage below 2.5x and adjusted FFO/debt below 
10% on a sustained basis. The ratios are based on figures that take into 
account RATCH's JV exposures.

A downgrade of Thailand's sovereign rating or a reduction of EGAT's stake
in the company would also be negative for RATCH's rating.

In addition, the issuer and senior unsecured rating could be notched down 
if there is an expected material increase in priority debt, or if the 
gradual deleveraging of RatchGen does not eventuate as planned.