Moody's affirms MISC

Moody's Investors Service said it affirmed the A2 local-currency issuer and senior unsecured debt ratings of Malaysia-based MISC Bhd. following the announcement of the company's six-month results for the period ended Sept. 30.

The ratings reflect the application of Moody's Joint Default Analysis, which is the result of strong support for MISC from Petronas (rated A1 with stable outlook) and MISC's high dependence on Petronas, Moody's said.

The strong support and high dependency reflect the strong strategic and operational integration of Petronas and MISC and their exposure to similar economic risks in the energy sector, the agency said.

These strengths are counterbalanced by the increased capacity in the energy transportation sector, which may continue to depress freight rates, Moody's said, adding that MISC has huge capital expenditures requiring additional debt funding that will result in higher leverage in the coming years.

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