KUALA LUMPUR, June 24 — Prime Minister Tun Dr Mahathir Mohamad has today expressed confidence in Petroliam Nasional Bhd (Petronas) despite the recent rating downgrade, due to Moody’s Investors Service revising its methodology last week.
When asked to respond to the downgrade by the global rating agency, Dr Mahathir said he believed the new rating will not adversely affect Petronas and downplayed the matter.
“That is their assessment and does not mean they are necessarily right.
“Sometimes they do make incorrect assessments but we cannot criticise them as they are free to do so,” he told reporters at the 20th Asia Oil and Gas Conference held in KLCC here.
Last week Moody’s Investors Service downgraded Petronas domestic issuer and foreign currency senior unsecured ratings to A2 from A1 as well as changed the outlook to “stable” from “negative”.
The global rating agency said the Petronas’ credit metrics remain strong but the lower ratings were due its revised cross-sector methodology.
“The agencies can do as they wish. We do not necessarily have to follow the rating agency’s opinion,” Dr Mahathir reiterated.
Moody’s senior vice president Vikas Halan reportedly said 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.
However, Halan said, its ratings can be maintained one notch above the sovereign rating due to the company’s strong credit metrics, low dependence on the domestic economy (70 per cent of revenue generated through exports and overseas) and superior access to the international capital markets.
