Thai PTTEP to sell $700 mn bonds in March-April

BANGKOK: Thailand's PTT Exploration and Production Pcl said on Tuesday it planned to sell $700 million of five-to-10-year bonds in March-April, adding a downgrade by Moody's Investors Service had no impact on its fund-raising plan.

The proceeds from the bond issue will be used for working capital and business expansion, Penchan Charikasem, senior executive for corporate finance, told reporters.

"We are on track to sell $700 million in bonds during March and April. The downgrade will not affect our funding plan and investor confidence," Penchan said.

Late on Monday, Moody's Investors Service cut its rating for PTTEP's issuer and foreign currency bonds to "Baa1" from "A3" with a stable outlook, the same as Thailand's sovereign rating.

Moody's said the downgrade reflected higher credit risk after PTTEP signed a deal to buy a 40 percent stake in a Statoil oil sands projects in Canada.

The rating agency also downgraded parent PTT Pcl's issuer and foreign currency bond ratings to "Baa1" from "A3" to reflect the weakened credit profile of major subsidiary PTTEP and PTT's own planned investments.

PTT Chief Financial Officer Tevin Vongvanich said the downgrades had no impact on existing financial costs and future fund-raising plans.

PTT also planned to sell 35 billion baht ($1.15 billion) bonds this year, as part of its plan to raise 150 billion baht via bonds or loans over the next five years, Tevin said.

PTTEP, 65 percent owned by state-controlled PTT, plans to spend 504 billion baht ($16.5) during 2011-2015 to expand production and boost sales.

PTTEP, which ranks among Asia's top 10 explorers and competes with big Chinese oil firms such as CNOOC and Sinopec, is involved in 44 oil and gas exploration and development projects.

PTTEP Chief Executive Anon Sirisaengtaksin said the turmoil in North Africa and the Middle East had had limited impact on its operations there, which were still at the exploration phase.

PTTEP has interests in a project in Bahrain, one in Oman and two each in Algeria and Egypt.

The company maintained its 2011 petroleum sales target of 273,204 barrels of oil equivalent per day, Anon said.

At 0430 GMT, PTTEP shares were up 1.4 percent at 175.50 baht, while PTT was unchanged. The broad market was 0.7 percent lower.