High rating for PTTEP bonds
PTT Exploration and Production's subsidiary PTTEP Canada International Finance Plc has won relatively high ratings for its proposed senior unsecured fixed-rate notes, amid concerns over the parent company's massive investment plan.
Moody’s Investors Service has assigned a provisional (P)Baa1 rating with a negative outlook for the bonds, of which proceeds will be used primarily for refinancing and general corporate purposes including funding its exploration, development and production activities. Standard & Poor’s Ratings Services also assigned its ‘BBB+’ rating for the issue.
The ratings are the same as the ones assigned to PTTEP Canada’s unsecured and unsubordinated debentures worth US$700 million (Bt22 billion) issued last year to foreign institutional investors.
The rating reflects PTTEP’s direct, unconditional and irrevocable guarantee to the new issue.
PTTEP Canada, an indirect wholly owned subsidiary of PTTEP, was established for the primary purpose of borrowing and issuing debt securities on behalf of PTTEP. The rating on the proposed notes is subject to the review of the final issuance documentation.
To S&P, the issue rating reflects the long-term corporate credit ratings on PTTEP and its parent company, PTT, which should win government supports should anything negative happen.
“PTTEP’s dependence on PTT for almost all its revenue, and its aggressive growth plans, partly offset these strengths.
