Malaysia Rating Corporation Bhd has affirmed Tenaga Nasional Bhd issuer rating at AAA and the sukuk rating on TNB’s outstanding RM2.0 billion Al-Bai’ Bithaman Ajil Islamic Financing Bonds (sukuk) at AAAIS, the ratings carry a stable outlook.
The ratings incorporate a two-notch uplift based on our assessment of a high likelihood of government support based on TNB’s critical role as the country’s principal energy provider, among other factors.
“Sukuk principal of RM2 billion maturing in December 2021 will be repaid from internal funds and borrowings, its consolidated cash and bank balances stood at RM5.3 billion as at end-June 2021, providing a strong source of liquidity.
“For 1H2021, TNB’s revenue rose by 6.1% y-o-y to RM23.9 billion on the back of a modest recovery in electricity demand, meanwhile, in 1H2021, cash flow from operations (CFO) rose to RM9.0 billion with CFO interest coverage and debt coverage improving to 7.86x and 0.16x (1H2020: 5.09x; 0.09x),” it said.
Electricity consumption is expected to resume its uptrend in 2H2021 as more businesses reopen while pandemic concerns ease on high vaccination rates.
