Moody's may downgrade Titan Petrochemicals

Moody's Investors Service said it put Hong Kong-based Titan Petrochemicals Group Ltd.'s Ba3 corporate family rating and B1 senior unsecured bond rating on review for possible downgrade following the announcement of the company's 2005 results.

The agency said it concerned about Titan's weakening financial position, which includes decreasing margins, high leverage, a modest coverage position and aggressive capex spending, against the backdrop of a volatile tanker market and high fuel costs. Adjusted debt to EBITDAR and EBIT to interest coverage as of December 2005 were weak at 7.3x and 1.4x, respectively.

The company is undergoing a rapid growth phase and its expansion strategy could potentially limit financial flexibility in an unfavorable operating environment, the agency said.

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