Fitch rates Siam Cement notes A(tha)

Fitch Ratings said it assigned a national long-term rating of A(tha) to the Siam Cement PCL's new 15 billion in Thai baht unsecured debentures due 2018.

The proceeds will be used to refinance debt and fund future capital expenditures.

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

The ratings reflect the company's well-diversified sources of revenue from its chemical, cement and building materials, the agency said, and paper businesses.

This diversification supported cash flow generation when its chemical business faced an industry-wide downturn in 2011 to 2012, Fitch said.

The ratings are constrained by the company's exposure to the cyclicality of the chemical and paper businesses, a lack of pricing power because the majority of its products are commodities and the sensitivity of its earnings to energy prices, the agency said.

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