Aman Sukuk Bhd - 2013

MARC has affirmed its AAAIS rating on special purpose vehicle Aman Sukuk Berhad’s (Aman) Islamic Medium Term Notes (IMTN) programme of up to RM10.0 billion with a stable outlook. Aman was set up by its parent Pembinaan BLT Sdn Bhd (PBLT), a wholly-owned entity of the Government of Malaysia (GoM), to issue the IMTNs to finance the construction of police quarters and facilities for Polis DiRaja Malaysia (PDRM). The construction is undertaken by PBLT under a build, lease and transfer project model (BLT).

The rating affirmation is underpinned by the credit profile of the GoM as the single obligor and sub-lessee of the completed police quarters and facilities under the irrevocable sublease agreements between GoM and PBLT. PBLT has in turn assigned all sublease rental collections to Aman, the quantum of which is structured to meet the repayment profile of each series of IMTN issued, ensuring sufficient cover of the principal and profit payments throughout the tenure of the rated programme. The rating also incorporates the elimination of construction risk as the IMTNs can only be drawn down for completed projects as well as commingling risk as all sublease payments are routed into a security account jointly maintained by the security agent and the issuer without passing through PBLT's bank accounts.

As at end-September 2013, PBLT has completed 82.9% of the total project value of RM7,499.3 million while 64 projects of the total 74 projects have received Certificates of Completion and Compliance (CCC). As at end-October 2013, RM5,030.0 million IMTNs in five series have been issued under the programme. The first two redemptions of RM170.0 million (under Series 1) and RM180.0 million (under Series 2) are due on February 28, 2014 and October 21, 2014 respectively, against which the balances in their respective security accounts as at end-September 2013 are sufficient to meet the payments.

The stable outlook reflects MARC's expectations that the sublease rentals backing the transaction will continue to be supported by the GoM with timely receipt of funding allocations.

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