MISC and Petronas LNG face downgrade by Moody’s

Fitch expects Petronas to pay a lower dividend of RM16bil in 2016, down from RM26bil in 2015 and RM29bil in 2014.

KUALA LUMPUR: Moody's Investors Service has placed all the ratings of MISC Bhd and Petronas LNG Ltd (PLL) on review for downgrade as it mulls downgrading their major shareholder, Petroliam Nasional Bhd (Petronas).

The ratings agency said on Tuesday the review on MISC and PLL’s ratings followed its the review for downgrade of Petronas’s ratings (A1 review for downgrade) initiated on Jan 22.

The national oil company was among the seven south and south east Asian energy companies under review for downgrade.

“PLL's A3 issuer rating is positioned two notches below its ultimate parent, Petronas. This top down approach reflects PLL's full ownership by, and strong operational and financial integration with Petronas.

“MISC's Baa2 issuer rating incorporates a three notch uplift from strong support provided by its parent, Petronas,” it said.

Moody’s said the review would primarily focus on the assessment of implications on parental support for the companies on the back of a deterioration of the parent's credit strength. The review will conclude following the completion of review on Petronas by end of the first quarter. 

The ratings agency pointed out a downgrade of Petronas' ratings would likely result in a similar rating action on the ratings of Petronas LNG and could lower the level of support incorporated in the rating of MISC.