Although Malaysian politicians and government officials remain in full denial of reality over a US Justice Department investigation of massive fraud involving Prime Minister Najib Razak and his family, local and international bankers are not.
The bankers are trying to digest the implications of a downgrade by Fitch Ratings in late July of long-term foreign and local currency issuer default ratings for Petronas, Malaysia’s state-owned energy conglomerate, from A to A minus. That followed a downgrade of the government’s IDRs themselves on July 12 from A to A minus.
In a statement, Fitch said that while Petronas continues to maintain a strong credit profile, the Petronas IDRs are constrained by the Malaysian government’s own IDRs. An issuer default rating is a measure of credit risk, defined by the threat of an entity’s becoming defunct or entering into a variety of legal proceedings from bankruptcy to administration, receivership, liquidation or other formal winding-up procedures.
“The downgrade will certainly worry bankers especially, all for the right reasons because how much more blue-chip can you get than Petronas?” asked a Malaysian businessman who asked not to be named. Another source pointed out that Petronas is usually higher ranked than sovereign IDRs “so what does it all mean for the broader economy?” Full story...
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The bankers are trying to digest the implications of a downgrade by Fitch Ratings in late July of long-term foreign and local currency issuer default ratings for Petronas, Malaysia’s state-owned energy conglomerate, from A to A minus. That followed a downgrade of the government’s IDRs themselves on July 12 from A to A minus.
In a statement, Fitch said that while Petronas continues to maintain a strong credit profile, the Petronas IDRs are constrained by the Malaysian government’s own IDRs. An issuer default rating is a measure of credit risk, defined by the threat of an entity’s becoming defunct or entering into a variety of legal proceedings from bankruptcy to administration, receivership, liquidation or other formal winding-up procedures.
“The downgrade will certainly worry bankers especially, all for the right reasons because how much more blue-chip can you get than Petronas?” asked a Malaysian businessman who asked not to be named. Another source pointed out that Petronas is usually higher ranked than sovereign IDRs “so what does it all mean for the broader economy?” Full story...
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