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Moody’s maintains PTT’s Baa1 ratings with stable outlook
Moody’s Investors Service has affirmed the Baa1 long-term issuer and senior unsecured rating of PTT Public Company Limited (PTT), a Thai oil and gas company.
Key Takeaways
- Moody’s has affirmed PTT’s Baa1 ratings due to its strategic importance in Thailand’s energy sector and high likelihood of government support, despite weak financial profile and evolving regulatory risks.
- PTT’s adjusted retained cash flow to net debt is currently below the downgrade trigger, but the company’s prudent financial management and flexibility in deferring spending are expected to improve its credit metrics over the next year.
- PTT has excellent liquidity, with sufficient cash and cash equivalents to cover its debt maturities, capital spending, and dividend payments through December 2024.
The rating agency also affirmed the Baa1 rating on backed senior unsecured notes issued by PTT Treasury Center Company Limited, a subsidiary of PTT. Moody’s maintained the stable outlook on the ratings.
PTT’s strategic importance to the government of Thailand
The affirmation reflects PTT’s strategic importance to the government of Thailand and its role in the energy sector. PTT’s financial profile is currently weak, but Moody’s expects the company to improve its credit metrics over the next year.
However, PTT faces regulatory risks in Thailand that could impact its earnings and cash flows. PTT has strong liquidity and its cash and cash equivalents are expected to cover its debt maturities and capital spending. The rating outlook is stable, reflecting the expectation of higher sovereign support for PTT. The ratings could be upgraded if Thailand’s sovereign rating is upgraded, while a downgrade could occur if Thailand’s sovereign rating is downgraded or if PTT’s credit metrics deteriorate further.
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