Moody's: PTT outlook negative

Moody's Investors Service said it changed the outlook to negative from stable for the A2 local-currency issuer rating of PTT Public Co. Ltd.

The company's A3 foreign-currency issuer and senior unsecured bank loan ratings, and A2 foreign-currency bond rating was affirmed.

"The change in outlook reflects an expected increase in PTT's consolidated leverage due to debt-funded investments over the next three years which - coupled with a likely contraction in profits and cash flow generation, in view of subdued market conditions - will in turn reduce the cushion within its current A3 fundamental rating," Renee Lam, a Moody's vice president, said in a statement.

PTT's standalone A3 rating is underpinned by its relatively stable cash flow - derived from its monopoly in gas transmission and distribution in Thailand - and the strength of its upstream subsidiary PTTEP, the agency said.

The rating incorporates strong credit support from the Thai government in view of its 67% stake.

The rating also reflects PTT's relatively small production base and higher degree of domestic orientation, Moody's said.

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