Moody's affirms PTT Chemical

Moody's Investors Service said it affirmed the Baa3 issuer rating and foreign-currency senior unsecured bond rating of Thailand-based PTT Chemical PCL. The outlook is stable.

The ratings are supported by the company's competitive cost structure, solid cash flow generation capability, adequate financial strength, strong support from its parent company PTT PCL, major market position in Thailand, secured access to feedstock supply and product sales via long-term contracts and downstream expansion, the agency said. Adjusted debt to EBITDA improved to 1.4x during 2005.

Moody's said the ratings also reflect the cyclical nature of the petrochemicals industry, PTT Chemical's relatively small operating scale and short track record on a global scale, the large capital expenditure required for its expansion plans and their potential impact on its credit metrics, as well as execution and operating risks associated with the expansion.

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