Moody's lowers Petronas view to negative

Moody's Investors Service said it affirmed the A1 domestic issuer and foreign-currency senior unsecured ratings of Petroliam Nasional Bhd. (Petronas).

The agency also said it affirmed the A1 rating on the senior unsecured notes issued by Petronas Capital Ltd., provisional A1 rating on the $15 billion medium-term note program set up by Petronas Capital and A1 rating on the sukuk issued through Petronas Global Sukuk Ltd.

The outlook also was changed to negative from stable.

The action follows news from the government of Malaysia that Petronas will pay dividends of 26 billion in Malaysian ringett in 2018 and 54 billion in Malaysian ringett in 2019.

The negative outlook reflects a view that the financial profile of Petronas may deteriorate if the government continues to ask the company to keep dividend payments high, especially should oil prices decline, the agency explained.

Such a situation would no longer support a ratings level for the company, which is currently two notches higher than that of the sovereign, Moody's said.

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