Fitch rates PTT notes AAA(tha)

Fitch Ratings said it assigned a national long-term rating of AAA(tha) to PTT PCL’s upcoming issue of up to 4.2 billion in Thai baht senior unsecured debentures due 2021.

The proceeds will be used to refinance debt, Fitch said.

The notes are rated at the same level PTT’s national long-term rating as they constitute direct, unsecured, unconditional and unsubordinated obligations of the company, the agency said.

PTT will face pressure on its credit metrics in 2015 because of weaker operating cash flows stemming from lower oil prices, Fitch said.

The company’s financial profile benefits from stable cash flows from its gas business, which is underpinned by steady demand and long-term supply and sales agreements with take-or-pay conditions on a cost-plus pricing structure, the agency said.

PTT has reduced its capital expenditure budget for 2015 through 2019 following the decline in oil prices, but subsidiary PTT Exploration and Production Co. Ltd.’s capital expenditures are expected to remain relatively high during the same period, Fitch said.

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