TRIS Rating Affirms Company Rating on CKP at A, Senior Unsecured Debt Ratings at A-, and Assigns A- Rating to Senior Unsecured Debt Worth Up to THB4 Billion, with Stable Outlook
TRIS Rating affirms the company rating on CK Power Public Company Limited (CKP) at A, with a stable outlook, and also affirms the ratings on CKP’s senior unsecured debentures at A-. At the same time, TRIS Rating assigns the rating of A- to CKP’s proposed issue of up to THB4 billion in senior unsecured debentures. The proceeds from the new debentures will be used to repay its coming due debentures, to finance investments, and to fund working capital.
The issue ratings one notch below the company rating reflects the structural subordination of the debentures, relative to the loans extended to CKP’s operating subsidiaries.
The ratings mirror CKP’s strengths in developing and operating large-scale hydroelectric power plants, reliable cash flow derived from power purchase agreements (PPAs) with the Electricity Generating Authority of Thailand (EGAT), and the track record of sound operations. However, the ratings are held back by the susceptibility to hydrology risk and the country risk of the Lao People’s Democratic Republic (Lao PDR).