(The following statement was released by the rating agency)
July 02 - Standard & Poor’s Ratings Services said today that its ratings on Petroliam Nasional Bhd. (PETRONAS: foreign currency A-/Stable/--; local currency A/Stable/--; axAAA/--) are not affected by the company’s agreement to acquire Progress Energy Resources Corp . (unrated). We do not expect the proposed investment to affect PETRONAS’ debt leverage. This is because the company is likely to use cash for the initial investment of approximately C$5.5 billion including convertible debentures. PETRONAS’ financial risk profile is “minimal” and the company has “strong” liquidity, as defined in our criteria, with cash (including restricted cash related to financing arrangements) and fund investments of Malaysian ringgit 164.6 billion (about US$53.6 billion) as of March 31, 2012.
PETRONAS’ stand-alone credit profile is better than our expectation for the current rating. However, the company is sensitive to government intervention given its critical role and integral link with the government. We have therefore equalized the long-term rating on PETRONAS with the sovereign credit rating on Malaysia (foreign currency A-/Stable/A-2; local currency A/Stable/A-1; axAAA/axA-1+).