Fitch cuts Siam Cement debt to A(tha)

Fitch Ratings said it downgraded Siam Cement plc's national long-term rating to A(tha) from A+(tha) and national long-term ratings of its existing senior unsecured debentures to A(tha) from A+(tha), and affirmed its national short-term rating at F1(tha). The agency also said it assigned an A(tha) national long-term rating to the company's upcoming senior unsecured debentures of up to 20 billion in Thai baht due 2013.

The outlook has been revised to stable from negative.

Proceeds of the new debentures mainly will be used to refinance the company's maturing debentures and is partly reserved for investing in new projects.

The downgrade is a result of the effect of weakening global economy on the company's 2008 earnings performance and margins, which weakened to below expectations, Fitch said.

The global economic recession and Thailand's sharp economic slump will put pressure on demand and pricing prospects for the company's core businesses in 2009, the agency said, slowing its de-leveraging over the next 24 months.

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