(The following was released by the rating agency)
-- On July, 27, 2011, Standard & Poor's Ratings Services lowered the local currency sovereign rating on Malaysia to 'A' from 'A+'.
-- We are, therefore, taking rating actions on three GREs: PETRONAS, Axiata, and Telekom Malaysia.
-- The sovereign rating action has no rating impact on any other corporate entity that we rate in Malaysia.
SINGAPORE (Standard & Poor's) July 28, 2011--Standard & Poor's Ratings Services said today that it took various rating actions on three Malaysian government-related entities (GREs) after the sovereign rating action on Malaysia (foreign currency A-/Stable/A-2; local currency A/Stable/A-1; axAA+/axA-1) (see "Malaysia 'A-' FC Rating Affirmed; Local Currency Rating Lowered To 'A' From 'A+' On Revised Methodology; Outlook Stable," published on July 27, 2011, on RatingsDirect on the Global Credit Portal) as follows:
To From
Downgraded
Petroliam Nasional Bhd. (PETRONAS)
Local currency rating A/Stable/-- A+/Stable/--
ASEAN scale rating axAA+/-- axAAA/--
Axiata Group Bhd.
Foreign currency rating BBB/Stable/-- BBB+/Stable/--
Local currency rating BBB/Stable/-- BBB+/Stable/--
ASEAN scale rating axA/-- axA+/--
Senior unsecured notes BBB- BBB
CreditWatch Action
To From
Telekom Malaysia Bhd. (TM)
Foreign currency rating A-/Watch Neg/-- A-/Stable/--
Local currency rating A-/Watch Neg/-- A-/Stable/--
ASEAN scale rating axAA/Watch Neg axAA/--
Senior unsecured notes A-/Watch Neg A-
Affirmed
Petroliam Nasional Bhd.
Foreign currency rating A-/Stable/--
Senior unsecured notes A-
We lowered the local currency rating on PETRONAS to reflect the company's critical role and integral link with the Malaysian government and its sensitivity to government intervention. We equalized the long-term corporate credit rating on PETRONAS with the sovereign credit rating on Malaysia. We assessed PETRONAS' stand-alone credit profile to be 'aa-'.
We downgraded Axiata to reflect the sovereign local currency rating action because our ratings on the company factor in our view of extraordinary government support. According to our GRE methodology, we have now equalized the ratings on Axiata with our assessment of its stand-alone credit profile of 'bbb'. We continue to believe there is a "moderate" likelihood that the Malaysian government, through its investment holding arm Khazanah Nasional Bhd., would provide timely and sufficient extraordinary support to Axiata in the event of financial distress. This is based on our view that Axiata has a "strong" link with the government, although it has a "limited" role in Malaysia's economy compared with that of other Malaysian GREs.
We consider TM to have a "strong" link with, and an "important" role to, the government. We, therefore, believe there is a "moderately high" likelihood of extraordinary government support to TM, whose stand-alone credit profile we assess to be 'bbb+'. We will resolve the CreditWatch placement on TM, in which Khazanah owns 28.7%, based on our assessment of the company's stand-alone profile and the sustainability of the recent improvement in its financial metrics. A CreditWatch with negative implications indicates that we could lower or affirm the ratings in the next 90 days. Given TM's strong business risk profile, we will consider the company's financial policies in light of its investment and funding plans for the next couple of years.
The sovereign rating action does not affect the ratings on any other corporate entities that Standard & Poor's rates in Malaysia, either privately owned or GREs. These entities include Tenaga Nasional Bhd. (BBB+/Stable/--; axA+/axA-1) and AmanahRaya Real Estate Investment Trust (BBB-/Negative/--; axBBB+/--).
RELATED CRITERIA AND RESEARCH
-- Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010
No comments:
Post a Comment