Phoenix Park Gas Proces­sors Ltd (PPG­PL) has had its cor­po­rate cred­it rat­ing down­grad­ed by a notch. The Caribbean In­for­ma­tion and Cred­it Rat­ings Ser­vice Ltd (Cari­CRIS), said the nat­ur­al gas pro­duc­er's rat­ing was low­ered from Cari­AAA to Cari­AA+ on its re­gion­al rat­ings scale. Mean­while, its rat­ing on the na­tion­al scale has gone down from ttAAA to ttAA.

Ac­cord­ing to the rat­ings ser­vice, PPG­PL's rat­ings show that the com­pa­ny's lev­el of cred­it­wor­thi­ness, when com­pared with that of oth­ers oblig­ors, is high.

Cari­CRIS said PPG­PL was able to main­tain its rel­a­tive­ly high rat­ing be­cause of like­ly sup­port from its par­ent com­pa­ny, the Na­tion­al Gas Com­pa­ny (NGC), in the event of fi­nan­cial dis­tress, low op­er­at­ing costs and low break-even prices and healthy debt ser­vic­ing and liq­uid­i­ty met­rics de­spite de­clin­ing rev­enue and prof­itabil­i­ty.

How­ev­er, the rat­ing agency not­ed that the down­grade was in part fu­elled by this de­cline in prof­itabil­i­ty, which it said af­fect­ed oth­er play­ers in the mar­ket be­side PPG­PL. Ac­cord­ing to Cari­CRIS, this de­cline is in its third year and is ex­pect­ed to con­tin­ue in­to 2015.

Oth­er fac­tors that have in­creased PPG­PL's risk pro­file, said Cari­CRIS, are low oil and gas prices in­ter­na­tion­al­ly, per­sis­tent gas short­ages in the up­stream sec­tor caused by un­der-in­vest­ment in ex­plo­ration and pro­duc­tion as well as in­creased com­pe­ti­tion in its tra­di­tion­al mar­kets.

The rat­ing agency said ad­di­tion­al fac­tors that may im­pact on PPG­PL's rat­ing in the near fu­ture are a fur­ther 20 per cent de­cline in sales over the next 12 to 18 months, con­tin­u­ing loss of its LPG mar­ket share and a change in the cred­it wor­thi­ness of its par­ent com­pa­ny NGC.