Fitch revises Petronas to positive

Fitch Ratings said it has revised the outlook on Petroliam Nasional Berhad's senior unsecured foreign currency and senior unsecured local currency ratings to positive from stable. At the same time, the agency has affirmed the ratings at BBB+ and A, respectively.

Fitch said the new outlook on Petronas' foreign currency rating reflects the change in outlook on Malaysia's foreign currency rating earlier this month, as Fitch considers Petronas' foreign currency rating to be constrained by that of Malaysia.

However, Fitch does not consider Petronas' local currency rating to be constrained by that of Malaysia. Accordingly, any upgrade of Malaysia's local currency rating may not necessarily lead to a corresponding upgrade of Petronas' local currency rating, the agency said.

Fitch points out that Petronas' local currency rating better reflects the company's fundamental credit qualities, and that if the sovereign constraint loosens over time, Petronas' foreign currency rating should converge with its local currency rating.

Fitch noted the positive outlook on the latter is based on Petronas' continuing financial and operating strengths, which support the likelihood of an upgrade in the coming 18 months.

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