PTT Global Chemical Public Co. Ltd.

The negative outlook on GC mirrors that on the local currency rating on PTT. We could lower the rating on GC if any of the following occurs: We lower the local currency rating on PTT. We assess GC's strategic relevance to PTT to have weakened. This could be indicated by a fall in PTT's shareholding in GC or a considerable shift in the company's business integration with the parent. We will revise GC's 'bbb-' stand-alone credit profile downward if the company's debt-to-EBITDA ratio permanently increases above 3.0x. We could revise the outlook on GC to stable if we take a similar action on the local currency rating outlook on PTT. Thailand's GDP to decline by 5.1% in 2020, followed by

...Unfavorable industry conditions will continue to hamper the earnings of Thailand-based PTT Global Chemical Public Co. Ltd. (GC) over the next two to three years. Subdued petrochemical spreads, driven by industrywide capacity additions, will likely overwhelm any benefit for the company from lower feedstock costs stemming from low hydrocarbon prices over the next two to three years. At the same time, a recessionary global economic outlook will lower consumer demand and cap refining and petrochemical spreads, in our view. We expect GC's EBITDA to be Thai baht (THB) 27 billion-THB29 billion in 2020 and THB38 billion-THB42 billion per year in 2021-2022, reflecting earnings during the current industry downturn, compared with THB66 billion during the peak cycle in 2017....

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