AMAN SUKUK BERHAD - 2015

MARC has affirmed its AAA_IS 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. The rating action affects the outstanding RM6.6 billion IMTNs issued under the rated programme.

The rating reflects the credit strength of the Malaysian government as the sole paymaster of the sublease rental payments and the quantum of sublease rental payments that is deemed to be sufficient to meet the principal and profit payments under the IMTN programme.

Aman is a wholly owned funding vehicle of Pembinaan BLT Sdn Bhd (PBLT), the developer of a series of quarters and facilities for the Polis DiRaja Malaysia (PDRM) throughout the country. The development is carried out under a build, lease and transfer (BLT) project model and is divided into projects and sections. Noteholders are not exposed to PBLT’s construction risk as the IMTNs can only be issued for projects or sections of projects that have been issued with certificates of completion and compliance (CCC). Upon receipt of the CCC, PBLT will enter into sublease rental agreements with the Malaysian government.

As at end-June 2015, Aman issued RM7.1 billion under the rated programme, the proceeds of which were used to acquire sublease rental receivables from PBLT. Sublease rental payments for the securitised receivables are paid directly into the respective series’ security account to eliminate commingling risk. The quantum of sublease rentals is also structured to meet the repayment profile of each series for the IMTN issued.

As at end-June 2015, PBLT has completed 95.2% of the total project value of RM7.5 billion; of the total 74 projects, 72 projects have received CCC. Aman redeemed RM50.0 million (Series 3) and RM140.0 million (Series 4) notes in April and July 2015 respectively, while a larger redemption sum of RM465.0 million will fall due in FY2016. MARC notes that the current cash balance of RM1.9 billion in the company’s security accounts will be sufficient to meet the scheduled payments for the next three years under each series of issuance.

The stable outlook reflects MARC's expectations that the sublease rental stream backing the transaction will continue to be supported by timely receipt from the Malaysian government.

Major Rating Factors

Strengths

• Predictable and sufficient sublease rental payments to meet obligations;
• Credit strength of Malaysian government; and
• Irrevocability of sublease obligations of the government.