TRIS Rating Co., Ltd. has affirmed the "AA" rating with "stable" outlook to the Bt4,000 million depository receipts on The Bangchak Petroleum PLC's (BCP) subordinated convertible debentures (BCP141A) issued by Siam DR Co., Ltd. (SIAMDR). The rating reflects credit support in terms of principal protection provided by the Ministry of Finance (MOF) to buy back the issue at the original offering price should BCP be unable to make its scheduled payments, the credit quality of the underlying issuer (BCP) and the additional security elements embedded into the transaction structure itself.
While the "stable" rating outlook of SIAMDR's depository receipts on BCP's convertible debentures is derived from the principal protection from the MOF and the credit quality of BCP itself. The rating of this issue may be changed if there is a significant change in BCP's credit quality.
TRIS Rating reported that BCP's credit quality is derived from the company's inherent constraints in its existing refinery, and the above-average fluctuations in oil prices and gross refinery margins. The credit assessment also takes into consideration the company's improved capital structure following its financial restructure and the good prospects for oil demand. A huge investment of US$250 million in BCP's new cracking unit is expected to both alleviate the company's limitation in its refinery and yield more valued refined products. However, TRIS Rating said that there is uncertainty about the financing scheme and the prevailing economic situation during construction period for the new cracking unit. - End
Siam DR Co., Ltd. (SIAMDR) Issue Rating: BCP141A: Bt4,000 million depository receipts on The Bangchak Petroleum PLC's AA
subordinated convertible debentures due 2014 Rating Outlook: Stable