MARC Ratings has affirmed its AAA_IS rating on Aman Sukuk Berhad’s (Aman) Islamic Medium-Term Notes (IMTN) Programme of up to RM10.0 billion with a stable outlook. The total outstanding amount under the programme stood at RM2.25 billion as at end-July 2023.

 

The rating affirmation reflects the credit strength of the Malaysian government as the sole obligor of the annual sublease rental payments, the quantum of which is deemed sufficient to meet the principal repayments and profit payments under the IMTN programme on a timely basis. 

Aman is a wholly-owned funding vehicle of PBLT Sdn Bhd, the developer of 74 construction projects for Polis DiRaja Malaysia (PDRM) comprising living quarters and other facilities. The projects were undertaken under a build, lease and transfer (BLT) model. Upon completion of each project, PBLT entered into irrevocable lease and sublease agreements with the Malaysian government. 

The IMTNs were issued in seven independent series, proceeds from which were used to acquire the rights to entitle sublease rental receivables of the said projects from PBLT. The sublease rental payments were structured to meet the repayment schedule of each series of the issued IMTNs. As at end-April 2023, combined cash balance in the security accounts stood at RM1.7 billion. Individual security account balances are more than sufficient to meet IMTN profit payments and principal repayments of the remaining RM273.3 million in 2023 and RM790.3 million through 2024. 

The stable outlook reflects our expectation that the steady sublease rental payments from the Malaysian government will continue on a timely basis. 

The rating and/or outlook could face pressure in the event that PBLT faces any untimely receipt of sublease payments from the government that would reduce the cash balance to meet the sukuk repayments.