Fitch rates Property Perfect debentures BBB+(tha)

Fitch Ratings said it assigned an expected BBB+(tha) national long-term debt rating to Property Perfect PCL's Thai baht 450 million secured debentures due February 2008.

The outlook is negative, based on the company's vulnerability to a further slowdown in Thailand's single detached housing market.

Proceeds will be used for land acquisition for future project development and partly for working capital.

The rating is based on the creditworthiness of Property Perfect and the credit enhancement from a mortgage of freehold land with an average value of Thai baht 708 million, representing a value-to-loan ratio of 157%, as well as a 50% principal guarantee by Thai Military Bank PCL (A(tha)/positive/F1(tha)), the agency said.

Property Perfect has strong brand recognition in Thailand's single detached housing market, but Fitch said the ratings are constrained by rising interest rates, a slowdown in inventory turnover due to more intense competition, construction delays, rising construction material costs and liquidity risks.

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