TRIS Rating Co., Ltd. has affirmed the rating of the senior secured debentures of Golden Land Property Development PLC (GOLD) at “BBB” and has assigned GOLD with the “positive” rating outlook. The rating reflects GOLD’s accepted brand name in the high-income housing market, the company’s moderate balance sheet, and recurring income from its serviced apartments. The rating takes into consideration GOLD’s frequent management turnover and the cyclical nature of the property development market. The slowdown in demand for residential property and weak consumer confidence remain rating concerns. The rating also takes into consideration the bank guarantees from commercial banks that are being used to replace the land and buildings previously pledged as collateral through the life of the debentures. The “positive” outlook reflects GOLD’s success at turning non-productive assets into commercially-viable properties. The company’s high-rise projects are expected to be conservatively financed to maintain a target debt to capitalization ratio of 50%-55%. A rating upgrade is likely when GOLD reaches the harvesting period from its investments and housing operations show signs of significant improvement. TRIS Rating reported that GOLD is a medium-sized property developer that develops single detached house (SDH) projects and condominium projects for high-income homebuyers in the Bangkok Metropolitan Area (BMA). Currently, New World Group is the major shareholder holding a 24% stake in the company. GOLD also owns The Ascott Sathorn serviced apartments and has a 33% ownership interest in Gold Property Fund (GOLDPF), which owns the Mayfair Marriott serviced apartments. GOLD is currently developing four SDH projects with average prices between Bt8-Bt20 million per unit. In 2007, GOLD had no new condominium sales and SDH presales continued to slow. From a peak of Bt5,166 million in 2004, new residential sales declined to Bt1,084 million in 2006 and to Bt760 million for the first nine months of 2007. This was due to the slowdown in the residential market and a change in GOLD’s management. The company’s serviced apartments performed favorably in 2007 with a slight increase of revenue per available room at Ascott Sathorn of 9% from Bt2,686 per day in 2006 to Bt2,926 per day in the first nine months of 2007. GOLD sold one of the two apartments, Mayfair Marriott to GOLDPF and received net proceeds of Bt1,986 million in May 2007. TRIS Rating said, GOLD’s financial profile improved in 2007 as a result of cash flow generated from its asset disposal strategy. Funds from operations, which bottomed out in 2006 at Bt72 million, increased to Bt797 million in the first nine months of 2007. GOLD’s debt-to-capitalization ratio improved to 41% as of September 2007 from more than 50% in recent years, but is expected to deteriorate in the near future as construction of several commercial property projects continues. Looking forward, GOLD will continue to focus on SDHs that are priced at more than Bt10 million per unit. With large land plots in existing SDH projects and its made-to-order strategy, the company may require a modest amount of funding for its new SDH projects. However, for its mixed use high-rise projects, a substantial investment of at least Bt3,000 million will be needed for development during the next three years. -- EndGolden Land Property Development PLC (GOLD) Issue Rating:GOLD088A: Bt1,100 million senior secured debentures due 2008 Affirmed at BBB Rating Outlook: Positive-------------------------------------------------------Copyright 2008, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.