MARC affirms rating on MISC’s RM2.5bil Islamic notes, stable outlook

MISC Eagle Pilar. MARC said over the medium term, MISC’s two key segments’ performance will depend on the sustainability of oil demand.

PETALING JAYA: Malaysian Rating Corp Bhd (MARC) has affirmed its AAAIS rating on MISC Bhd’s RM2.5bil Islamic medium-term notes programme with a stable outlook.

The rating agency said the affirmed rating incorporates MISC’s position as a key global player in the energy-related shipping business, its stable revenue generation from long-term liquefied natural gas (LNG) and offshore contracts, as well as its healthy liquidity position.

The rating continues to benefit from an uplift on the credit strength of parent Petroliam Nasional Bhd (Petronas), which has an AAA/stable public information rating from MARC. The rating uplift is based on the strong parental support from Petronas for which MISC serves as the main LNG shipping provider as well as the close operational and financial integration between these companies.

“MISC’s credit profile benefits from earnings visibility provided by long-term contracts for LNG shipping and offshore floating assets. These contracts and MISC’s ability to replenish them on a timely basis provide a steady source of revenue, which accounted for more than half of MISC’s total revenue of RM2.5bil in the first quarter (Q1) of 2021.

“Its other segment, petroleum shipping, was impacted by lower tanker rates while the heavy engineering segment experienced a delay in revenue recognition due to technical issues during commissioning of a project and operational disruption,” it said in a statement yesterday.

MARC said over the medium term, MISC’s two key segments’ performance will depend on the sustainability of oil demand, which has shown some improvement due to the strong economic rebound in developed countries.

As at the end of Q1 of 2021, the group had 37 LNG and ethane carriers as well as 12 offshore floating assets in operation.

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