S&P upgrades PTT Chemical

Standard & Poor's said it raised Thailand-based PTT Chemical PCL's corporate credit and senior unsecured debt ratings to BBB from BBB- and removed the corporate credit rating from CreditWatch with positive implications, where it was placed on Dec. 8.

The outlook is stable.

The rating revision reflects PTT Chemical's improved market position and strong cost position after the completion of the merger between Thai Olefins PCL and National Petrochemical PCL, the agency said. PTT Chemical continues to benefit from its 50.03% ownership by state-owned oil and gas conglomerate PTT PCL (BBB+/stable) and its significant business integration with PTT.

S&P said the ratings are constrained by the small scale of its operations relative to global competitors, the inherent industry risk given the volatility of product prices and customer concentration.

The agency predicted that PTT Chemical will maintain a moderate financial profile with funds from operations at more than 30% of total debt and debt to EBITDA of below 2.5x in the medium term.

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