Thai Oil Public Company Limited has successfully issued $600 million in subordinated perpetual bonds, bolstering funding for its Clean Fuel Project (CFP) without raising overall borrowing costs. The move is expected to lower Thai Oil’s net debt-to-equity ratio, reducing credit rating risk while supporting future investment requirements, according to Krungsri Securities.
The bonds were offered to international investors and fully guaranteed by Thai Oil. They carry a 6.1% coupon for five years and three months, after which the rate will adjust according to the offering terms. Moody’s assigned the bonds a Ba2 rating, and S&P rated them BB-. Listed on the Singapore Exchange, the issuance saw demand outpace supply by a factor of 11, attracting interest from both Asian and U.S. investors.
Thai Oil executed a currency swap, allowing the company to pay interest in Thai baht at approximately 4%—aligning with its existing debt costs. Recent repurchases of bonds and loans totaling around $933 million further support Thai Oil’s efforts to manage leverage prudently. The $600 million in new funds increases available liquidity to around 19 billion baht. Combined with asset monetization proceeds and cash reserves, Thai Oil estimates it now has adequate resources for anticipated incremental investment in the CFP, expected to total between $1.77 billion (57-59 billion baht).
Thai Oil’s net debt-to-equity ratio is projected to decline from 0.6x as of Q3 2025 to approximately 0.5x, lowering the risk of future rating downgrades. The company’s cost of borrowing remains unchanged due to the swap arrangement.
Progress updates on additional CFP project costs are expected around January 21, 2026, with most major contractor appointments close to completion. Thai Oil’s operational outlook for the fourth quarter of 2025 is strong, as the company is positioned to outperform sector peers following the end of its major plant maintenance shutdown. The recovery in petroleum product spreads is anticipated to contribute to improved earnings.
Krungsri Securities continues to rate Thai Oil as a ‘Buy’ with a 2026 target price of 37.25 baht per share, and a bull case of 47.5 baht per share. Despite share price gains reflecting optimism around project progress, analysts still see long-term upside. Key drivers include potential benefits from wider light-heavy crude oil spreads, especially if Venezuelan supply increases. In 2026, the resumption of crude oil buoy operations and an expected 10% increase in refining volume are projected to enhance margins and support earnings growth.
