S&P puts PTT Chemical on positive watch

Standard & Poor's said it placed its BBB-corporate credit and senior unsecured debt ratings on PTT Chemical PCL (formerly Thai Olefins PCL) on CreditWatch with positive implications.

S&P said the placement follows the formation of PTT Chemical through the merger of Thai Olefins and National Petrochemical PCL. PTT Chemical is now the flagship petrochemical company of PTT PCL (foreign currency BBB+/stable/--; local currency A-/stable/--).

The rating on PTT Chemical reflects its favorable cost efficiency and operating rate, good industry prospects, its strong market position post-merger, and improving financial profile. PTT Chemical also benefits from its over-50% ownership by PTT, a state-owned oil and gas conglomerate, and its significant business integration with PTT, S&P said.

The rating is constrained by the small scale of PTT Chemical's operations compared to its global peers, inherent industry risk due to the volatility of product prices, and customer concentration, the agency said.

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