Fitch rates Thai Oil debt AA-(tha)

Fitch Ratings said it assigned a national long-term rating of AA-(tha) to Thai Oil PCL's 3 billion Thai baht of unsecured and unsubordinated debentures due 2022 being issued to a group of private investors.

The outlook is negative.

The proceeds have been earmarked for working capital, refinancing and capital expenditure.

The ratings reflect the company's large scale, highly complex production capacity and cost competitiveness, Fitch said.

The ratings also take into account its strategic and operational links to PTT PCL as its major refinery, the agency said. Its investment in the power businesses should help to partially offset the earnings volatility of the refining business, although the contribution of this segment to EBITDA has been relatively small, Fitch added.

The ratings are constrained by Thai Oil's high vulnerability to oil prices and fluctuations in gross refining margins and the cyclicality of its aromatics business, the agency said.

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