CREDIT ANALYSIS REPORT

AMAN SUKUK BERHAD - 2017

Report ID 5558 Popularity 1412 views 54 downloads 
Report Date Oct 2017 Product  
Company / Issuer Aman Sukuk Bhd Sector Property
Price (RM)
Normal: RM500.00        
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Rationale

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.

The affirmed rating is premised on the credit strength of the Malaysian government as the sole paymaster of the sublease rentals which are 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 74 projects for the Polis Diraja Malaysia (PDRM). The projects, comprising living quarters and facilities, have been developed under a build, lease and transfer (BLT) model. By end-August 2016, PBLT had fully completed construction of the 74 projects with a value of RM7.5 billion, all of which received certificates of completion and compliance (CCC), following which the company had entered sublease rental agreements with the Malaysian government.

Proceeds from the IMTNs, which have been issued in series, have been used to acquire sublease rental receivables for the completed projects from PBLT. The sublease rentals are structured to meet the repayment profile of each series for the IMTN issued. As at end-July 2017, the outstanding IMTNs under the rated programme stood at RM5.5 billion, of which a total of RM565.0 million under Series 1, 2, 5 and 7 will come due in 2018. MARC notes that the current cash balance of RM1.8 billion in the company’s security accounts as at end-June 2017 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 of payments from the Malaysian government.

Major Rating Factors

Strengths

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