TRIS Rating Affirms “A-/Positive” Ratings for “PL” and Senior Debts

TRIS Rating Co., Ltd. has affirmed the ratings of “A-” for the company rating and issue ratings of the senior debentures issued by Phatra Leasing PLC (PL; debenture issues PL126A, PL132A and PL163A). At the same time, TRIS Rating has also affirmed a rating of “A-” for PL’s proposed issue of up to Bt500 million in senior debentures due within 2017. The rating for the proposed issue has replaced the “A-” rating previously assigned by TRIS Rating on 30 March 2011 for a debenture issue that PL had proposed earlier. The size of the earlier debenture issue was for up to Bt1,000 million in senior debentures with a stated maturity within 2016. In April 2011, PL issued Bt500 million in senior debentures due within 2016, but the remaining Bt500 million of the issue was postponed to the beginning of 2012. Therefore, the maturity of the remaining Bt500 million is changed from due within 2016 to due within 2017. PL plans to use the proceeds from this offering to expand and finance its assets for lease portfolio. At the same time, TRIS Rating has also affirmed the “positive” outlook for the company and issue ratings of PL.

TRIS Rating reported that PL’s ratings reflect the company’s strong market position in the automobile operating lease industry and the proven ability of the management team to consistently expand the lease portfolio despite increasingly intense competition. The ratings also reflect PL’s stringent credit risk and residual risk management systems, which have enabled the company to maintain the quality of its assets. The ratings also take into consideration an increasing demand from corporations to outsource their automobile maintenance service needs. However, the ratings have been moderated by the intense competition, which will continue to be a major constraint on PL’s profitability. In addition, a growing loan portfolio, financed with increased borrowings, will weaken the company’s capital structure. The “positive” outlook reflects PL’s continual improvements in its risk management systems and business profile, its stronger market position, and support from its major shareholder. The ratings could be upgraded if the company is able to maintain its leading position in the automobile operating lease industry by diversifying its customer base, retaining its major customers, and maintaining the quality of its assets. The company is expected to sustain the current level of operating performance while keeping the leverage ratio in line with TRIS Rating’s expectation.

TRIS Rating said, PL continues to maintain its market-leading position as a provider of automobile operating leases. The company renders both operating leases and financial leases to medium- and large-sized companies. At the end of September 2011, PL had net assets of Bt6,765 million for lease and had outstanding financial lease receivables of Bt1,431 million, up from Bt6,372 million and Bt907 million, respectively, at the end of December 2010. Net income for the first three quarters of 2011 was Bt189 million, down 13.6% from Bt219 million in the same period of 2010. Although lower than the previous year, net income for the first nine months was in line with TRIS Rating’s expectation. The decrease was mainly due to a higher tax burden. An existing tax benefit, which covered a portion of PL’s investments in new assets for lease, expired at the end of 2010. -- End

Company Rating: Affirmed at A- Issue Ratings: PL126A: Bt300 million senior debentures due 2012 Affirmed at A- PL132A: Bt500 million senior debentures due 2013 Affirmed at A- PL163A: Bt500 million senior debentures due 2016 Affirmed at A- Up to Bt500 million senior debentures due within 2017 Affirmed at A- Rating Outlook: Positive TRIS Rating Co., Ltd./www.trisrating.com Contact: [email protected], Tel: 0-2231-3011 ext 500/Silom Complex Building, 24th Floor, 191 Silom Road, Bangkok 10500, Thailand Copyright 2012, 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.