S&P rates Petronas notes A-

Standard & Poor’s said it affirmed an A- long-term foreign-currency and A long-term local-currency corporate credit ratings on Petroliam Nasional Bhd. (Petronas)

The outlook is stable.

The agency also said it affirmed the company’s axAAA long-term Asean regional scale rating, along with the A- long-term issue ratings on the senior unsecured notes that the company guarantees.

S&P also said it assigned A- long-term foreign-currency rating to a proposed multi-currency medium-term notes program by Petronas Capital Ltd. and an A- long-term foreign-currency rating to a proposed drawdown under the program.

Petronas unconditionally and irrevocably guarantees the program, the agency said.

Petronas continues to play a critical role and maintain an integral link with the Malaysian government, which is expected to continue the next five years at least, S&P said.

That is why the company’s ratings are equalized with the sovereign rating on Malaysia, which wholly owns Petronas through the Ministry of Finance, the agency said.

Petronas also is expected to maintain a conservative balance sheet over the next three years, S&P said, despite limited erosion in the company’s cash-flow adequacy because of lower oil prices and still-high capital spending and dividends.

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