Bangkok--27 Jun--Moody's Investors Moody's Investors Service has assigned an A2 long-term rating to the proposed issue of JPY 36 billion (approximately USD 290 million) unsubordinated, unsecured, ten year bonds by PTT Public Company Ltd., (PTT). The rating outlook is stable. The issue of the bonds is part of PTT's continuing treasury management programme of financing maturing obligations, general working capital and investing in capacity growth both in the Company and across the Group. The rating of A2 is derived from an underlying credit assessment of the company with reference to Moody's methodology for Global Integrated Oil and Gas companies, combined with support and sovereign related factors. The underlying credit rating -- known as its baseline credit assessment - is 7, (equivalent to an A3) reflecting the strong performance of its exploration and production subsidiary, its utility-like gas supply business in Thailand (primarily to the power sector) and its market leadership of the domestic refining and marketing sector. Its credit metrics are supportive of the rating accommodating the cyclicality of the industry, the high investment needed to support growth across the broad span of the PTT group and the challenges of reorganizing and developing its petrochemical interests. In particular, PTT exhibits strong interest cover and targets leverage (Net debt/EBITDA) of below 2.0x. Moody's expects free cash flow generation to be broadly neutral over the medium term assuming a modest dividend payout. In addition to the underlying credit strength, Moody's considers the likelihood of support from the Government of Thailand, its majority shareholder, were a default likely to occur. In applying Moody's Joint Default Analysis to Government-Related Issuers, Moody's believes the likelihood of support from the state (Thailand rating Baa1/stable) is high given the strategic importance of the company. The dependence, which considers the correlation between the credit profiles of PTT and the nation in time of crisis, is regarded as medium, given PTT's reliance on the domestic economy for most of its business. In rating the bond at A2, which is above the A3 foreign currency ceiling for Thailand, Moody's views that in the event of a default by the sovereign, the imposition by the Thai government of a debt moratorium would be unlikely, and thus PTT's ability to service a Yen denominated bond, distributed in Japan and governed by Japanese law would not be limited. PTT Public Company Limited, headquartered in Bangkok, Thailand, is 52.32% directly-owned by the Ministry of Finance with a further 15.54% indirectly owned by the government. PTT is an integrated oil and gas company whose activities include i) exploration and production undertaken by its 66.65%-owned subsidiary PTT Exploration and Production Co. Ltd. , ii) national gas transmission and distribution and iii) gas processing. PTT is the leading oil marketing company in Thailand and has extensive trading operations. It also holds leading positions in Thailand's oil refining and petrochemical sectors through both majority and minority interests, primarily in listed entities. In 2006, PTT achieved consolidated pretax profits of USD4.2bn on revenues of USD34.2bn. Singapore Alan Greene Senior Vice President Corporate Finance Group Moody's Singapore Pte Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (65) 6398-8308 Sydney Brian Cahill Managing Director Corporate Finance Group Moody's Investors Service Pty Ltd JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100