TRIS Rating Places a “Negative” CreditAlert on Company Rating of “BTSC”and Places a “Developing” CreditAlert on Its Issue Ratings

TRIS Rating Co., Ltd. has placed the CreditAlert with “negative” implication to the company rating of Bangkok Mass Transit System PLC (BTSC). At the same time, TRIS Rating has also placed a “developing” CreditAlert implication to the ratings of BTSC’s senior debentures. The rating action follows the announcement of BTS Group Holdings PLC (BTSG), BTSC’s shareholder with a 97.5% stake, regarding the resolution of BTSG’s Board of Director to sell the net farebox revenue of the Core BTS Skytrain System to the Infrastructure Fund (IFF). The Core BTS Skytrain System is operated by BTSC under the concession with the remaining period of 17 years. The IFF establishment will be subject to (i) approval by BTSG’s shareholders, (ii) the consent from BTSC’s bondholders on various amendments, and (iii) a minimum sale price of Bt50,000 million. BTSC will place a portion of the proceeds from the IFF transaction as security for the full amount of principal and future interest payable under the terms of BTSC’s existing debentures. The remaining will be distributed to BTSG, its parent company, to finance the 33.33% investment in IFF and to be reserved for future investment.

BTSC’s business includes the Core BTS Skytrain System, the operation and maintenance (O&M) services for the BTS skytrain extension, and the media business operated by VGI Global Media PLC. For the first half of fiscal year 2012/2013 (April - September 2012), contribution from mass transit business constituted 55% of total revenue while O&M services and media business contributed 12% and 33%, respectively. In terms of earnings before interest, tax, depreciation, and amortization (EBITDA), contribution from mass transit and O&M services was 73% and media business accounted for 26%. For the post IFF transaction, BTSC’s remaining operation will be O&M services and media business. Going forward, BTSC will continue to be BTSG’s strategic subsidiary to operate and possess the core expertise for the mass transit business of the group. BTSG is expected to provide the full support to BTSC’s operation as the key strength to bid for new electric train. Hence, although BTSC’s credit profile will be impacted by the reduction of cash flow from mass transit business, its company rating will likely be the same as BTSG’s, its parent company.

The “developing” implication for BTSC’s issue ratings is based on the company’s intention to immediately provide a reserve or security package securing the full amount of principal and future interest payable under the terms of its debentures. The company is considering a provision of bank guarantee for the outstanding debentures. Hence, upon the satisfactory commitment, the issue ratings will be based on the bank’s credit quality.

The CreditAlert announcements for BTSC’s ratings will be resolved once the IFF transaction and the security package are finalized. — End

Company Rating: A CREDITALERT DESIGNATION: Negative Issue Ratings: BTS138A: Bt2,500 million senior debentures due 2013 A BTS148A: Bt4,000 million senior debentures due 2014 A BTS158A: Bt1,500 million senior debentures due 2015 A BTS168A: Bt1,500 million senior debentures due 2016 A CREDITALERT DESIGNATION: Developing 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.