TRIS Rating Assigns New Issue Rating of “A+” to “CPN”and Affirms Company & Current Issue Ratings at “A+”, with “Stable” Outlook

TRIS Rating Co., Ltd. has assigned the rating of “A+” to the proposed issue of up to Bt1,000 million in senior debentures of Central Pattana PLC (CPN). At the same time, TRIS Rating has also affirmed the company and current issue ratings of CPN at “A+”. The outlook remains “stable”. CPN will use the proceeds from the new debentures to fund its planned capital expenditures. The ratings reflect the company’s leading position in retail property development, proven record in managing high-quality shopping centers, reliable cash flow from contract-based rental and service income, and conservative financial policy. The ratings also take into consideration the high level of capital expenditures needed for expansion during the next three years and the uncertain political situation in Thailand.

The “stable” outlook reflects CPN’s ability to maintain its solid position in the retail property development industry. With the resumption of revenue from the CentralWorld and increased rental income from new shopping centers, CPN will have more cash flow to fund its high capital expenditures.

TRIS Rating reported that CPN is the largest retail property developer in Thailand. Its major shareholders are the Chirathivat family (32%) and Central Holding Co., Ltd., the leading retailer in Thailand (27%). The ownership link with the Central Group is seen as a benefit since Central Department Store has been a strong magnet for shopping centers owned by CPN. As of December 2010, CPN managed 15 shopping centers, with total retail space of 964,612 square meters (sq.m.), in Bangkok and other major cities in Thailand. In March 2011, CPN opened its latest shopping center in Chiangrai province with 27,500 sq.m. of retail space. The amount of retail space in Bangkok operated by CPN has expanded continuously, growing at an average rate of 5.4% per annum for the past five years, slightly higher than the 5.1% annual average growth rate of total retail space in Greater Bangkok. CPN has long been the market leader in retail property in Thailand. As measured by total retail space in Greater Bangkok, CPN had 22% market share at the end of December 2010. The average occupancy rate of CPN’s 15 shopping centers stood at 95% as of December 2010, better than the industry average of 91%. The new shopping center opened in March 2011, CentralPlaza Chiangrai, achieved a 93% occupancy rate.

CPN closed the CentralWorld shopping center in April 2010, due to the political unrest in Bangkok. The center was partially damaged by fire on 19 May 2010 and the loss was initially estimated at no more than Bt3,500 million. The loss is expected to be mostly covered by insurance policies, including industrial all risk, business interruption and terrorism insurance. The insurance claim is expected to be received in part in 2011 with the remainder received within the next two years. CPN has already re-opened most of the CentralWorld space as of December 2010. The reconstruction of the Zen department store, majority-owned by the Chirathivat family, is expected to be completed in the fourth quarter of 2011.

In 2010, CPN’s rental and service income slightly decreased, falling by 3.5% to Bt9,822 million, compared with 2009. The decrease derived mainly from the loss of income from closing CentralWorld and the transfer of CentralPlaza Pinklao to a property fund in late 2009, despite additional contributions from four new shopping centers opened and acquired in 2009. Net profit in 2010 also decreased, falling to Bt1,130 million, including the Bt804 million write-off of the CentralWorld assets. As of December 2010, the total debt to capitalization ratio increased to 51.23% and total debt rose to Bt19,941 million, due to higher capital needs for new projects and the renovation of the CentralWorld. During 2011-2013, development plans will require approximately Bt10,000 million in capital expenditures annually for CPN’s projects both in Thailand and abroad. CPN’s financial performance in 2011 is expected to be better than in 2010, due to the full recovery of the CentralWorld and the opening of three new shopping centers. Although the CentralPlaza Lardprao shopping center has been closed for renovation since February 2011, the center is expected to open in August, said TRIS Rating. -- End

Company Rating: Affirmed at A+ Issue Ratings: CPN119A: Bt1,500 million senior debentures due 2011 Affirmed at A+ CPN126A: Bt3,000 million senior debentures due 2012 Affirmed at A+ CPN135A: Bt2,000 million senior debentures due 2013 Affirmed at A+ CPN136A: Bt1,200 million senior debentures due 2013 Affirmed at A+ CPN145A: Bt1,000 million senior debentures due 2014 Affirmed at A+ Up to Bt1,000 million senior debentures due within 2016 A+ Rating Outlook: Stable Copyright 2011, 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. All methodologies used can be found at http://www.trisrating.com/en/rating_information/rating_criteria.html