Research Update: Ratch Group Public Co. Ltd. Outlook Revised To Negative On Higher Growth Investments; 'BBB+' Ratings Affirmed

Ratch Group Public Co. Ltd.'s leverage could stay high over the next two years as the company continues to pursue debt-funded growth investments. However, we note that the Thailand-based power producer has some flexibility to control leverage, depending on the cash flow profile of its new investments, the pace of capital spending, and its financial policy. On Dec. 14, 2020, S&P Global Ratings revised its outlook on Ratch to negative from stable. At the same time, we affirmed our 'BBB+' long-term issuer credit rating on the company and the 'BBB+' long-term issue ratings on the senior unsecured notes and U.S. dollar-denominated medium-term note program that RH International (Singapore) Corp. Pte. Ltd. (RHIS), a wholly owned subsidiary of Ratch, issued. Ratch

...- Ratch Group Public Co. Ltd.'s leverage could stay high over the next two years as the company continues to pursue debt-funded growth investments. - However, we note that the Thailand-based power producer has some flexibility to control leverage, depending on the cash flow profile of its new investments, the pace of capital spending, and its financial policy. - On Dec. 14, 2020, S&P Global Ratings revised its outlook on Ratch to negative from stable. At the same time, we affirmed our '###+' long-term issuer credit rating on the company and the '###+' long-term issue ratings on the senior unsecured notes and U.S. dollar-denominated medium-term note program that RH International (Singapore) Corp. Pte. Ltd. (RHIS), a wholly owned subsidiary of Ratch, issued. Ratch guarantees the notes. - The negative outlook reflects the risk that Ratch's debt-to-EBITDA ratio could stay above 3.0x over the next 12-18 months, owing to the company's elevated spending plans and growth aspirations....

Research Update