TRIS Rating Assigns Current Company and Issue Ratings,and Assigns New Issue Ratings of “CPN” at “A+/Stable”

TRIS Rating Co., Ltd. has affirmed the company rating of Central Pattana PLC (CPN) and the ratings of CPN’s existing debentures at “A+”. At the same time, TRIS Rating has assigned the rating of “A+” to CPN’s proposed issue of up to Bt3,000 million in senior debentures. The rating outlook remains “stable”. The ratings reflect CPN’s leading position in the Thai retail property development industry, 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 CPN’s expansion plans and the current slowdown in the Thai economy.

The “stable” outlook reflects CPN’s ability to maintain its solid position in the retail property market. With high occupancy in existing shopping centers and its conservative policy to slow expansion, the company should be able to withstand the current economic slowdown in Thailand.

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. (27%), the leading retailer in Thailand. The ownership link with the Central group of companies is seen as a benefit since Central Department Store has been a strong anchor for shopping centers owned by CPN. From 2003, the retail space owned by CPN expanded at an average of 6.9% per annum, while the total supply of retail space in the Greater Bangkok grew by an average of 4.2% per annum. Currently, CPN operates 12 shopping centers in Bangkok and in other big cities in Thailand. With total retail space of 819,611 square meters (sq.m.), CPN is the market leader, with 24% market share, up slightly from 23% in 2007. The rise is mainly the result of the opening of CentralPlaza Chaengwattana. The 20-year renewal of the sub-lease agreement covering the CentralPlaza Ladprao location has also strengthened CPN’s leading position in the industry.

CPN’s solid operating performance is attributable to high occupancy rates and healthy same store sales growth for its shopping centers. The occupancy rate of the 10 shopping centers averaged 94.4% for the past five years. As of December 2008, the average occupancy rate stood at 97%, mainly due to the improved rate at CentralWorld. The growth rate of same store sales slipped from 14% in 2007 to 10% in 2008. Office building rentals now constitute a larger portion of total revenue, up sharply from 3.8% of total revenue in 2004 to 10.1% in 2008. The rise came after the offices@CentralWorld and office tower B at CentralPlaza Pinklao opened. CPN’s conservative financial policies are evidenced by the discipline in holding the net debt to equity ratio below one. Due to the slowdown in Thailand’s economy, the company postponed some projects and cut annual capital expenditures to Bt4,000-Bt6,000 million during 2009-2011, an approximately 25% reduction.

The retail sales index reported by the Bank of Thailand has continuously declined since the first quarter of 2008. The index fell by 6.5% year-on-year (y-o-y) in the fourth quarter of 2008, closely tracking the 4.3% slide in gross domestic product (GDP) for the same period. The consumer confidence index also decreased from 80.7 in March 2008 to 74 in February 2009. Further deterioration in overall economy and drops in private consumption remain rating concerns, said TRIS Rating. -- End

Company Rating: Affirmed at A+ Issue Ratings: CPN096A: Bt1,000 million senior debentures due 2009 Affirmed at A+ CPN096B: Bt500 million senior debentures due 2009 Affirmed at A+ CPN10DA: Bt1,500 million senior debentures due 2010 Affirmed at A+ CPN119A: Bt1,500 million senior debentures due 2011 Affirmed at A+ CPN126A: Bt3,000 million senior debentures due 2012 Affirmed at A+ Up to Bt3,000 million senior debentures due within 2014 A+ Rating Outlook: Stable Copyright 2009, 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.

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