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05 January 2020
HALAL ECONOMY

Malaysia’s Petronas mulls global bond issuance

The oil giant has six outstanding dollar bonds worth a total of $6.5 billion, in which $1.25 billion of notes are set to mature on 18 March 2020.

Bloomberg/Nadirah Zakariya


Malaysia’s Petroliam Nasional (Petronas) is considering selling global bonds for the first time in nearly five years, reported Bloomberg.

The state-owned oil firm called banks to submit pitches for the proposed dollar-denominated, benchmark-sized bonds last month and is expected to pick advisers soon. The last time the oil company tapped the global market was in 2015 when it sold $5 billion of dollar bonds.

The potential bond sale could come at a time when the cost of insuring Malaysian sovereign debt is at its lowest in more than a decade. The ringgit has strengthened 1.6 per cent against the dollar in the past month, making it the second best-performing currency in Asia.

Wan Zulkiflee Wan Ariffin, Petronas’ Chief Executive Officer said that Petronas is banking on Americas to help raise reserves and maintain production rates. The state-owned company will allocate a larger share of its future capital expenditure toward projects from Canada to Brazil as it completes a $27 billion refinery and petrochemicals project at home, said Wan Ariffin.

There has not been a final decision on the size and timeline of the proposed global bond sale as deliberations continue and Petronas can still decide against proceeding with an issuance.

Moody’s affirmed its A2 rating on Petronas, the sixth-highest investment grade and a notch above Malaysia’s sovereign rating.

 


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