Bangkok--Dec 8--Fitch Ratings
Fitch Ratings (Thailand) Limited has today upgraded the National Long-term rating on Thai Olefins Public Company Limited’s (“TOC”) senior secured bonds to ‘AA-(tha)’ (AA minus(tha)) and downgraded the National Long-term rating on National Petrochemical Public Company Limited’s (“NPC”) senior unsecured bonds to ‘A+(tha)’. At the same time, the agency has removed the ratings on TOC’s and NPC’s bonds from Rating Watch Positive and Rating Watch Negative, respectively, where they were placed on 14 March 2005 owing to the possible merger between the two companies. With the recent completion of the amalgamation between TOC and NPC and the incorporation of the new amalgamated entity, PTT Chemical Public Company Limited (“PTTCH”), Fitch has also simultaneously withdrawn the abovementioned ratings and assigned new ratings to PTTCH as follows: National Long-term ‘A+(tha)’, National Short-term ‘F1(tha)’ for senior unsecured debts (including bonds issued by the former NPC), as well as National Long-term ‘AA-(tha)’ (AA minus(tha)) for senior secured bonds assumed from TOC.
The ratings assigned to PTTCH are based on its projected rise in importance to PTT Public Company Limited (“PTT”) as its single flagship company in the gas-based petrochemical business, the increased scale of operation after the amalgamation, as well as its relatively strong pro-forma financial position. Based on 9M05 financial statements, Fitch estimates net debt/annualised EBITDA ratios of PTTCH at 0.5x (TOC: 0.8x, NPC: net cash). Despite the large capex plans and dividend payout, its financial leverage should remain relatively strong at less than 2.0x for net debt/EBITDA ratio, in line with PTT’s internal financial guidelines. PTT is likely to hold an approximate 50.0% stake in PTTCH, followed by Siam Cement Public Company Limited with 19.4%.
CONTACT: Orawan Karoonkornsakul, Lertchai Kochareonrattanakul, Vincent Milton; Bangkok, +662 655 4755
Note to Editors: Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with sub- or low-investment grade international sovereign ratings. The best risk within a country is rated ‘AAA’ and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as ‘AAA(tha)’ for National ratings in Thailand. Specific letter grades are not therefore internationally comparable.
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