Fitch affirms MBK

Fitch Ratings Thailand Ltd. said it affirmed Thailand-based MBK PCL's A-(tha) national senior unsecured rating, F2(tha) short-term rating and A-(tha) outstanding senior unsecured debentures. The outlook is stable.

Fitch said the affirmation reflects MBK's well-established market position in shopping plaza and hotel businesses in Bangkok, its relatively strong and stable cash flow generated from its shopping plaza operations, the operating recovery of Sheraton Krabi Beach Resort and the expected earnings contribution from new investments as well as strategic benefits from its stake in Siam Piwat Co. Ltd.

These positive aspects are partly offset by intensifying competition in the shopping plaza business as a result of increasing supply of retail rental space and renovation of existing operators in the area, but Fitch noted that this should be mitigated by MBK Center's strategic location, established name and ongoing renovation.

Due to its ongoing investments in core and non-core businesses, MBK's net debt to last-12-month EBITDAR has remained close to 3x over the past three years, although the agency said it recently declined to 2.6x in the six months ended December 2005.

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