S&P stabilizes Telekom Malaysia trend

S&P said it changed its outlook for Telekom Malaysia Bhd.’s long-term foreign-currency issuer rating to stable from negative and affirmed the A- ratings on the company’s foreign-currency rating and $300 million of senior unsecured notes due 2025.

“We revised the outlook on our foreign-currency issuer credit ratings on Telekom Malaysia to stable from negative following a similar rating action on the Malaysia sovereign credit rating (foreign currency A-/stable/A-2; local currency A/stable/A-1),” S&P said in a press release.

The Malaysian government owns more than 60% of the company. “The government also owns a special share in Telekom Malaysia via the Ministry of Finance (Inc.), which enables it to ensure Telekom Malaysia's direction is in line with government policies. Furthermore, the government had previously intervened to improve connectivity in the country at the expense of the company's near-term earnings. We believe the risk of such intervention will persist in the medium-term because Telekom Malaysia will remain instrumental to the government's intent to improve broadband speed and coverage in the country,” the agency said.

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