KUALA LUMPUR, March 18 — Moody’s Investors Service has affirmed Tenaga Nasional Bhd’s (TNB) A3 senior unsecured bond and senior unsecured credit facility ratings with a stable outlook.
The rating agency also has affirmed TNB’s baa2 Baseline Credit Assessment (BCA).
The affirmation follows TNB’s new regulated tariffs for the third regulatory period (RCP3) ending in December 2024, which will support the maintenance of its financial metrics at levels consistent with its baa2 BCA, Moody’s said.
“TNB’s baa2 BCA, in turn, captures its strong market position and moderate financial profile, as well as the supportive, but still relatively new regulatory framework under which it operates,” it said in a statement, today.
Moody’s expects TNB to maintain moderate financial leverage, as measured by retained cash flow (RCF)/debt, of around 13 per cent during RCP3 based on the regulated base tariff of 39.95 cents per kilowatt hour and an approved capital expenditure allowance of RM20.555 billion for regulated businesses.
“TNB exhibited stable earnings during the pandemic, benefiting from a supportive regulatory framework designed to protect its regulated revenue from declines in power demand,” it said.
Moody’s said it understands that earnings from TNB’s unregulated generation business predominantly comes in the form of capacity payments, independent from actual power dispatch or fuel prices.
“The stable rating outlook reflects TNB’s predictable operations and cash flow, underpinned by a supportive regulatory regime designed to protect the company against fluctuations in volume demand or fuel costs,” it said. — Bernama
