Moody's revises Thai Oil view to negative

Moody's Investors Service said it revised the outlooks for Thai Oil PCL and Thaioil Treasury Center Co. Ltd. to negative from stable. Thaioil is a wholly owned subsidiary of Thai Oil. I

"The change in outlook to negative reflects our expectation that Thai Oil's credit metrics could weaken beyond the downgrade threshold of its ratings, if the refining margins in Asia fail to improve, or if the company fails to contain the increase in its net borrowings over the next 12 months as it executes its refinery capacity expansion project," said Vikas Halan, a Moody's senior vice president, in a press release.

Singapore refining margins averaged $3.70/bbl for 2019, below the $6/bbl average for 2017-18, and turned negative in December, although margins have improved since then.

Moody’s also affirmed Thai Oil’s senior unsecured debt ratings. Thaioil is a co-issuer. Moody’s affirmed the Baa1 ratings on Thaioil’s backed senior unsecured notes. Thai Oil guarantees the notes.

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