KUALA LUMPUR (Jan 11): Moody's Investors Service changed Penerbangan Malaysia Bhd (PMB)'s senior unsecured debt's rating outlook to "stable" from "positive" while affirming the "A3" rating on its US$1 billion 5.625% guaranteed notes due March 2016.

In a statement today, Moody's said its rating action came after its decision to affirm Malaysia's "A3" government bond rating and change the outlook to "stable" from "positive" on Jan 11, 2016.

PMB's notes are irrevocably and unconditionally guaranteed by the Malaysian government.

"Thus, the sovereign rating action has led Moody's to change the outlook of the 'A3' rating for the notes to 'stable' from 'positive'," the firm noted.

PMB is indirectly wholly owned by the government through Khazanah Nasional Bhd, a state-owned strategic investment fund.

PMB was incorporated in 2002 as part of the restructuring of Malaysia's flag carrier, Malaysian Airline System Bhd (MAS, now known as Malaysia Airlines Bhd). PMB leases aircraft and aircraft engines to MAS.

The government views the civil aviation industry as strategically important to the domestic transportation system, international trade and tourism.

"PMB, as a result, is an important component of the airline industry," Moody's said.

PMB's principal activities are in acquiring, selling and leasing of aircraft and aircraft engines, investment holdings and other related services.