Fitch rates Siam Cement notes A(tha)

Fitch Ratings said it assigned a national long-term rating of A(tha) to Siam Cement PCL's new unsecured and unsubordinated debentures No. 1 2013 due 2017 of up to 25 billion in Thai baht.

The proceeds will be used to refinance the company's maturing debentures and fund its capital expenditures, the agency said.

The rating is in line with the company's national senior unsecured debt rating of A(tha).

The ratings reflect its well-diversified business, which helps support cash flow generation, particularly during the difficult operating period of its chemical unit in the past two years, Fitch said.

Likely strong cement and packaging paper sales should partly compensate for the slow recovery of chemical earnings in 2013, the agency said.

Factors constraining the company's ratings are its exposure to the cyclical chemical business, lack of pricing power due to the commodity nature of most of its products and its earnings sensitivity to energy prices, Fitch said.

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