Investing.com -- Moody’s Ratings has revised its outlook for two non-financial corporations in Thailand, PTT Public Company Limited (PTT) and PTT Exploration (OTC: PEXNY ) and Production Public Co. Ltd. (PTTEP), to negative from stable. The revision follows the affirmation of Thailand’s government issuer rating at Baa1 and the change in the country’s outlook to negative from stable on April 29, 2025.

The companies, both government related issuers (GRIs), had their Baa1 issuer and senior unsecured bond ratings affirmed. For PTT, this also included its baa2 Baseline Credit Assessment (BCA). The Baa1 rating on the backed senior unsecured notes issued by PTT Treasury Center Company Limited (PTT TCC), a wholly-owned subsidiary of PTT, as well as the Baa1 backed senior unsecured rating of PTT TCC’s bank credit facility, and the (P)Baa1 senior unsecured rating on the medium-term note (MTN) program established by PTT TCC and PTT, were also affirmed.

For PTTEP, the Baa1 issuer rating, its baa2 BCA and its (P)Baa1 senior unsecured medium-term note (MTN) program rating were affirmed. Additionally, PTTEP Treasury Center Company Limited’s (PTTEP TC) (P)Baa1 backed senior unsecured MTN program rating and Baa1 rating for its backed senior unsecured notes were affirmed. PTTEP TC is a wholly-owned subsidiary of PTTEP.

The change in outlook for both companies is reflective of the change in outlook on Thailand’s sovereign rating and the companies’ strategic importance in Thailand’s energy sector. PTT’s Baa1 issuer rating primarily reflects the company’s standalone credit strength, as captured in its baa2 BCA. The baa2 BCA reflects PTT’s strategic importance as Thailand’s national integrated oil and gas company; significant upstream production and control over around 60% of Thailand’s refining capacity; and excellent liquidity.

PTTEP’s Baa1 ratings reflect its standalone credit strength, captured by its baa2 BCA. The baa2 BCA reflects the company’s strong financial metrics, excellent liquidity and financial flexibility, high cash flow visibility from its long-term gas sales contracts and relatively low cost of production.

Given the negative outlook, an upgrade of PTT’s rating or PTTEP’s rating is unlikely in the near term. The rating outlook could be changed to stable if the rating outlook for the Government of Thailand is changed to stable. Downgrades could occur if the ratings of Thailand are downgraded; the company’s BCA deteriorates below baa3; or the government’s ownership in PTT declines below 51% or the government’s control over the company is reduced.

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