Moody's rates PTT notes A3

Moody's Investors Service said it assigned an A3 rating with a negative outlook to the senior unsecured fixed-rate notes to be issued by PTTEP Australia International Finance Pty, a wholly-owned finance subsidiary of PTT Exploration and Production PCL, which has A3 ratings and a negative view.

The proposed five-year notes of up to $250 million will be irrevocably and unconditionally guaranteed by PTT Exploration. The proceeds will be used primarily for funding PTTEP's exploration, development and production activities, Moody's said.

The rating combines PTTEP's stand-alone rating of Baa1 with a one-notch uplift reflecting the likelihood of PTT PCL providing credit support in a distress situation, the agency said.

The stand-alone Baa1 rating incorporates the stability and cash flow visibility afforded by the company's long-term gas sale contracts, the agency added.

Countering these strengths are PTTEP's high medium-term development capital expenditure and increasing appetite for acquisitions, coupled with leverage, Moody's said.

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