S&P upgrades Tenaga Nasional notes

S&P said it raised Tenaga Nasional Bhd.’s senior unsecured notes and U.S. dollar-denominated senior unsecured medium-term note program to BBB+ from BBB. The agency also upgraded long-term issue rating on the wakala trust certificates and multicurrency sukuk issuance program that TNB's wholly owned subsidiary, TNB Global Ventures Capital Bhd., issued to BBB+ from BBB.

“We raised our long-term issue rating on TNB's notes to reflect our expectation of a lower secured debt ratio and subordination risk. We believe the subordination risk of TNB's senior unsecured notes has decreased, and the notes no longer rank behind a material amount of secured debt and subsidiary-level debt in the group's capital structure. This is because TNB's secured debt ratio has steadily dropped over the past three years. It reached below 50% as of Dec. 31, 2021.

“The company has mainly raised unsecured debt in the past 12 months, which lowered its secured debt ratio (proportion of secured debt to total debt) to about 46% as of March 31, 2022. This was below our 50% threshold for notching down the issue rating,” S&P said in a press release.

Concurrently, S&P affirmed TNB’s BBB+ long-term issuer credit rating.

The outlook is stable.

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