Bangkok--4 Jan--Fitch Ratings Fitch Ratings (Thailand) Limited has today assigned an 'A+(tha)' National Long-term rating to PTT Aromatics and Refining Public Company Limited's (PTTAR) secured and amortising debentures. The Outlook is Stable. These debentures were transferred from The Aromatics (Thailand) Public Company Limited (ATC) after the recent completion of the amalgamation between ATC and Rayong Refinery Public Company Limited (RRC). Simultaneously, the agency has upgraded the National Long-term rating of ATC's secured and amortising debentures to 'A+(tha)' from 'A-(tha)' (A minus (tha)), removed the rating from Rating Watch Positive, which it was placed on 24 July 2007 following the announcement of the amalgamation, and withdrawn the rating. The rating assigned to PTTAR's secured debentures reflects its high operational link and support from PTT Public Company Limited (PTT), larger operating scale and more flexible and diversified operation after the amalgamation, which will, to a certain extent, help reduce the overall earnings volatility. Fitch notes the amalgamation will also enhance the company's economy of scale and market position, and will provide stronger financial position with lower financial leverage and higher coverage ratios. After the completion of the second aromatics complex (CPX II), PTTAR will become one of the top five aromatics producers in Asia and one of the largest complex oil refineries in Thailand. The rating is also based on PTTAR's secured long-term feedstock and aromatics sale agreements, its modern and complex refinery and its cost-competitive position. Most of PTTAR's aromatics products are sold to PTT under long-term contracts, while PTTAR sources condensate locally from the Gulf of Thailand, secured under a long-term contract with PTT. In addition, the rating reflects the seniority and secured nature of the debt. The debentures are secured by the operating plant, machinery and land lease assignment (of ATC). Moreover, PTTAR's secured debt was only 14.7% of EBITDA, 2.1% of total assets and 6.2% of total debt in 2006. PTTAR's credit strengths are tempered by its high vulnerability to oil prices and gross refinery margin (GRM) fluctuations, as well as the cyclicality of its aromatics business. PTTAR is also exposed to supply risks on its oil refining business owing to a high dependence on foreign oil supplies. Other credit concerns relate to its relatively high investment plan, which will lead to higher debt and financial leverage over the near term, as well as its high customer concentration. The Stable Outlook reflects the agency's expectation that PTTAR's stronger market position and improved financial position will support its relatively high investment plan. Fitch also expects PTTAR to keep its leverage consistent with the current credit metric throughout the industry cycle. Incorporated on 27 December 2007, PTTAR was a result of the amalgamation of ATC, the first and largest aromatics producer in Thailand, and RRC, a complex oil refinery with a capacity of 145,000 barrels per day. The amalgamation was initiated by PTT, the major shareholder of both entities, reflecting PTT's intention to restructure and consolidate its investments in the refining and petrochemicals businesses to gain benefits from integration and rationalise investment duplications. After the amalgamation, PTT, Thailand's largest and state-owned fully-integrated oil and gas company, owns a 48.7% stake in PTTAR. Note to Editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such 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. Contacts: Lertchai Kochareonrattanakul, Pirapong Nithikraiwut, Vincent Milton, Bangkok, +662 655 4755. Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215. Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. 101 Finsbury Pavement, London, EC2A 1RS