Fitch Affirms Ratings of PTT Chemical Plc at ‘A+(tha)’
Fitch Ratings (Thailand) Limited has today affirmed the National Long-term rating of PTT Chemical Plc. (“PTTCH”) at ‘A+(tha)’ with a Stable Outlook. Fitch also affirmed the company’s National Short-term ratings at ‘F1(tha)’. At the same time, Fitch affirmed the ratings of PTTCH’s outstanding senior unsecured debentures at ‘A+(tha) and the ratings of its outstanding secured debentures at ‘AA-(tha)’ (AA minus(tha)).
The ratings of PTTCH are based on its strategic significance to PTT Plc (“PTT”) as the latter’s single flagship company in the gas-based olefins business, the strong support from PTT, its large scale of operations, its favourable feedstock arrangement as well as its high level of production integration via downstream expansions.
The company’s forward integration into a variety of downstream products is expected to support earnings growth and reduce earnings volatility in the long term. PTTCH’s ratings are also underpinned by its relatively strong financial position. Despite its large investment plan which should result in an increase in its debt levels and financial leverage from the existing low levels, PTTCH is expected to be able to manage its financial leverage during 2006 to 2010 at a relatively comfortable level at less than 2.0x for net debt/EBITDA ratio, which is consistent with PTT’s financial guidelines. The ratings also take into account the cyclical nature of the petrochemicals industry, execution risks arising from new downstream projects, its large investment plans amid a less favourable operating environment as well as its relatively high exposure to single market. For more information please Contact: Orawan Karoonkornsakul, Lertchai Kochareonrattanakul, Vincent Milton; Bangkok, Tel: +662 655 4755.