Fitch affirms MBK

Fitch Ratings (Thailand) Ltd. said it affirmed MBK PCL's national long-term rating at A-(tha), national short-term rating at F2(tha) and senior unsecured debentures at A-(tha).

The outlook is stable.

The agency said the ratings reflect MBK's strong market position in the shopping plaza and hotel businesses in Bangkok, the relatively strong and stable cash flow generated from the MBK Center, expected earnings growth from new investments and the company's relatively strong financial position, which includes a net debt-to-EBITDAR ratio of 2.1x for the six months ended in December. The MBK Center's key competitive advantages are its prime location, established brand, strong traffic flows, diversified tenant base and varied target-customer profiles, all of which have helped generate stable cash flow streams.

Fitch said it expects MBK's long-term net debt-to-EBITDAR ratio to remain around 3x, but warned the ratio may temporarily increase above this level over the next two years due to MBK Center's land lease renewal, which could require a large debt-funded upfront payment. Other credit concerns include MBK's exposure to economic cycles and travel shocks and its high level of non-core investments, the agency said.

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