Bangkok--4 Sep--TRIS Rating TRIS Rating Co., Ltd. has affirmed the rating for Bt4,000 million depository receipts on The Bangchak Petroleum PLC’s (BCP) subordinated convertible debentures (BCP141A) of Siam DR Co., Ltd. (SIAMDR) at “AA” with “stable” outlook. The rating reflects the credit support, in terms of principal protection, provided by the Ministry of Finance (MOF) to buy back the issue at the original offering price should BCP be unable to make its scheduled payments on time, the additional security elements embedded into the transaction structure, and the underlying issuer’s credit quality. According to TRIS Rating’s report, BCP’s credit profile is related to the support from PTT PLC (PTT) and the progress of refinery improvement programs. However, these benefits are partially offset by the constraints of BCP’s existing refinery and the inherent fluctuations in oil prices and gross refining margins. The credit assessment also takes into consideration the company’s improved capital structure, and the good prospects for oil demand. The “stable” outlook for the depository receipts derives from the principal protection from the MOF and the credit quality of BCP. The rating of this issue may be revised if there is a significant change in BCP’s credit quality. TRIS Rating said, for the first half of 2007, BCP’s operating performance improved from its poor 2006 level. Refinery utilization rate increased to 53%, with a total gross refining margin of US$4.05 per barrel, while marketing performance was satisfactory, with a total marketing margin of Bt0.35 per liter. As a result, BCP’s operating margin before depreciation and amortization improved to 3.14%. The company’s capital structure also improved, due to a capital increase that will be used to fund its new hydrocracking unit. BCP’s debt to capitalization ratio stood at 40.6% as of December 2006, and improved slightly to 38.8% as of June 2007. With a conservative financing scheme of 56% debt financing for the new cracker project (total investment of US$378 million), BCP’s leverage is expected to increase slightly during the construction period. The new hydrocracking unit is expected to alleviate the company’s refinery limitations and yield more highly-valued refined products.