KUALA LUMPUR: The decision by Moody’s Investors Service to downgrade Petroliam Nasional Bhd’s (Petronas) domestic issuer and foreign currency senior unsecured rating to A2 from A1 is not necessarily accurate, said Prime Minister Tun Dr Mahathir Mohamad.
He said the decision would not impact the operations of the national oil producer and Moody’s was free to make its assessment.
“But, what from we see (based on) what Petronas is doing at present, we are confident the “downgrading” will not impact the company’s progress,” he told a media conference here after officiating the Asian Oil and Gas Conference (AOGC) 2019.
Moody’s also changed the outlook for Petronas to “stable” from “negative” and explained that the company’s credit metrics remain strong, but the lower ratings was due to its cross-sector methodology.
It also reported that the close credit linkages between the government of Malaysia (A3 stable) and Petronas cannot, under the revised methodology, support a rating for Petronas that is two notches higher than the Malaysian sovereign.
According to Moody’s, the company’s ties to the sovereign create potential for government interference that may have a negative impact on the company’s business profile or cash flow.
Source: Borneo Post