Moody's gives A3 to Sarawak Energy

Moody's Investors Service said it gave first-time local and foreign A3 issuer ratings to Sarawak Energy Bhd.

SEB's A3 ratings consider its baa2 baseline credit assessment and a two-notch uplift based on the very high likelihood of support from, and a high level of dependence with, the state of Sarawak, under the agency’s joint-default analysis approach for government-related issuers, Moody’s said.

“Moody's expects SEB's financial profile to trend upwards over the next five years. For example, Moody's projected retained cash flow (RCF)/net debt ranges from 13% to 16%, and funds from operations (FFO) interest cover ranging from 3.2x to 3.8x. These metrics are slightly lower but still comparable to the average metrics for fiscal years ending December 2019 to December 2021 at 16.3% and 3.6x, respectively, because of higher projected capital expenditure in the next three years,” the agency said in a press release.

The outlook is stable.

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