Fitch downgrades PTT Aromatics

Fitch Ratings said it removed PTT Aromatics and Refining PCL's ratings from Rating Watch negative following the bondholders' approval for a bond covenant change, and downgraded its national long-term rating to A-(tha) from A(tha), national short-term rating to F2(tha) from F1(tha) and national long-term rating on its secured and amortizing debentures to A(tha) from A+(tha).

The outlook is stable.

The removal of the watch, which began in December 2008, is based on the success of resolving the potential breach of the bond covenant. The bondholders recently agreed to change the bond covenant, removing the requirement for PTT to maintain its net debt-to-EBITDA ratio at below 4x, the agency said.

Nevertheless, the downgrades reflect a material weakening in PTT's financial leverage and worse than expected earnings growth, resulting in lower financial flexibility, Fitch said.

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