Fitch rates Siam Cement debentures A+(tha)

Fitch Ratings (Thailand) Ltd. said it assigned a long-term national rating of A+(tha) to The Siam Cement plc's unsecured unsubordinated debentures No.2/2005 of up to Thai baht 10 billion due 2009.

The newly issued debentures will be used to refinance the company's Thai baht 7.5 billion debentures maturing in October 2005 and to fund its new investments.

Fitch said the rating reflects Siam's high level of revenue diversification with cement, petrochemicals, paper and building products as core businesses. Due to its established brand recognition and extensive distribution network, the company has leading domestic market share in most of its core businesses. The rating is also based on its relatively solid financial position as well as its moderate long-term net debt to EBITDA target of 2.0x-2.5x.

The rating also takes into consideration the domestic oversupply and highly competitive environment of Siam Cement's core businesses. Meanwhile, the persistently high oil price has started to put pressure on the company's profitability and may weaken demand for some of its products, the agency said.

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