Bernama

MALAYSIAN NEWS : BUSINESS

November 16 , 2000 17:23PM

TENAGA NASIONAL'S RM400 MLN NOTES ASSIGNED P1 AND AA1 RATINGS

KUALA LUMPUR, Nov 16 (Bernama) -- Tenaga Nasional Bhd's RM400 million combined Murabahah Underwritten Notes Issuance Facility and Islamic Medium Term Notes, had been assigned short and long term ratings of P1 and AA1, respectively by Rating Agency Malaysia Bhd (RAM).

The ratings reflect Tenaga Nasional's strategic position as the dominant electricity utility provider for Peninsular Malaysia and Sabah, said RAM in a statement here.

Riding on higher economic activity and foreign currency gains, Tenaga Nasional returned to the black in financial year ended Aug 31, 1999 and has continued on the profitable track for financial year ended Aug 31, 2000, it said.

RAM believes that proceeds from Tenaga Nasional's planned divestment of its thermal generating assets are likely to be sufficient to address bullet debt servicing obligations over the next five years.

Nevertheless, Tenaga Nasional is still expected to gear up to fund its capital expenditure requirements.

To this end, TNB possesses strong financial flexibility in terms of accessing the domestic capital market for new funds and strong support from its major shareholder, the Malaysian government, RAM said.

Going forward, the operating environment for Tenaga Nasional will be challenging in light of the impending revision in the gas price as well as the uncertainty over the revision in the tariff structure, RAM said.

The eventual implementation of power pooling also poses a certain degree of uncertainty on Tenaga Nasional's credit risk profile, it added.-- BERNAMA