KUALA LUMPUR: Moody's Investors Service has assigned an A2 rating for the proposed US dollar-denominated senior unsecured notes to be issued by Petronas Capital Ltd and drawn down from its medium-term note (MTN) programme.
Moody's analyst Hui Ting Sim said Petronas' A2 ratings reflected its strong credit metrics and excellent liquidity, with a track record of maintaining a net cash position through the oil price cycle
The notes will be unconditionally and irrevocably guaranteed by its parent, Petroliam Nasional Bhd (Petronas) on an unsubordinated basis, and the guarantee would rank pari passu with the unsecured and unsubordinated obligations of Petronas.
"The proceeds will be used for debt refinancing and general corporate purposes, while the rating outlook is stable,” Moody’s said in a statement.
On the rating rationale, it said Petronas' credit metrics would likely stay strong through 2021 to 2022 with adjusted debt or capitalisation at around 22 per cent.
Meanwhile, Petronas reported that its net cash position fell to RM52 billion in 2020 from RM82 billion in 2019 because of the negative free cash flows arising from challenges caused by the pandemic.
Nevertheless, Petronas' liquidity and credit metrics remain excellent despite the difficult market conditions. - Bernama