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Rating downgrade on Petronas will not affect company, says Mahathir

24 Jun 2019 / 13:03 H.

KUALA LUMPUR: The recent downgrade of Petroliam Nasional Bhd’s (Petronas) domestic issuer and foreign currency senior unsecured ratings by Moody’s Investors Service is not expected to affect the national oil and gas company.

Prime Minister Tun Dr Mahathir Mohamad instead downplayed the downgrade, claiming assessments made by rating agencies were not always accurate.

“That is Moody’s assessment, but they are not necessarily right. Sometimes some agencies make inaccurate assessments. But we can’t criticise them because they are free to do so.

“But from what we see, I am confident the downgrade won’t affect Petronas,” he told reporters after attending the 20th Asia Oil and Gas Conference 2019 opening ceremony, here, today.

On Friday, Moody’s announced that Petronas would downgraded from A1 to A2 rating, claiming the company’s link to the government meant there was potential for interference that might impact negatively on its business profile and cash flow.

The rating agency added that Petronas’ ratings could face downward pressure if there were unexpected changes to the country’s policy for the oil and gas sector that result in a significant decline in its reserves and oil and gas entitlement.

Asked if Petronas’ re-rating would affect the country’s rating in general by other international rating agencies, Mahathir said the government was not bound by their opinions.

“They (rating agencies), can do what they want, but we are not necessarily going to just follow their opinion,” he said.

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