PETRONAS Global Sukuk Ltd. Proposed Wakala Sukuk Trust Certificates Assigned Preliminary #A-# Rating

Stocks and Financial Services Press Releases Thursday March 5, 2015 16:49
--5 Mar--Standard & Poor's

SINGAPORE (Standard & Poor's) March 5, 2015--Standard & Poor's RatingsServices today assigned its preliminary 'A-' issue rating to the proposed U.S.dollar-denominated Wakala trust certificates to be issued by PETRONAS GlobalSukuk Ltd.

PETRONAS Global Sukuk Ltd. is a special-purpose company incorporated inLabuan, Malaysia, for issuing sukuk trust certificates. PETRONAS Global SukukLtd. will enter into a "Wakala" agreement with Petroliam Nasional Bhd.(Petronas; foreign currency A-/Stable/--), an integrated oil and gas company,wholly owned by the Malaysian government through the Ministry of Finance.Under this agreement, the issuer will enter into an Ijara (lease financing),for at least 33% of the issued amount, and a Murabaha (sale financing), for atmost 67% of the issued amount, with Petronas.

The preliminary 'A-' rating on the proposed Wakala trust certificates reflectsthe long-term foreign currency issuer credit rating on Petronas because thetransaction fulfills the five conditions of our criteria for rating sukuk (see"Methodology For Rating Sukuk," published Jan. 19, 2015, on RatingsDirect):

Petronas will provide sufficient and timely contractual obligations for the repayment of the periodic distribution amounts (in the Ijara leg of the transaction) and the principal amount (through the purchase undertaking of the Ijara leg of the transaction and the deferred sale price of the Murabaha leg of the transaction); Petronas' obligations are irrevocable and unconditional;These obligations will rank pari passu with Petronas' other unsubordinated financial obligations;Petronas will undertake to cover all the costs related to the transaction, through a cost undertaking for the benefit of PETRONAS Global Sukuk Ltd.; andWe assess as remote the risks that a total loss event jeopardizes the full and timely repayments of the trust certificates. Our opinion is based on the unconditional and irrevocable obligations of Petronas to compensate for any shortfall between the insurance proceeds and the principal repayments related to the Ijara leg under a total loss event scenario.Our assessment is based on information as of Feb. 26, 2015 (see "Presale: PETRONAS Global Sukuk Ltd.," published March 5, 2015). We note that the preliminary rating is based on draft documentation. The final rating will depend upon receipt and satisfactory review of all final transaction documentation, including legal opinions. Should final documentation differ substantially from the draft documentation, we would consider a rating action on the trust certificates. (Mar 05, 2015 )--

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