AMAN SUKUK BERHAD - 2018

MARC 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 outstanding IMTNs under the rated programme stood at RM5.15 billion as at July 31, 2018.

The rating is premised on the credit strength of the Malaysian government to meet the sublease rental obligations on 74 developments for the Polis Diraja Malaysia (PDRM), which were developed by government-owned entity Pembinaan BLT Sdn Bhd (PBLT). Aman is a wholly-owned funding vehicle of PBLT for the developments which were undertaken on a build, lease and transfer model. Following the completion of each project, PBLT had 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 sublease rental receivables of the developments from PBLT. The sublease rentals were structured to meet the repayment profile of each series for the IMTNs issued. As at end-July 2018, the cash balance in Aman’s security accounts of about RM1.2 billion is sufficient to meet the scheduled payment of RM180.0 million IMTNs under Series 2 in October 2018 while a total of RM720.0 million IMTNs under Series 3, 4, and 6 will mature in 2019.

The stable outlook reflects MARC’s expectations that the Malaysian government will continue to make sublease rental payments on a timely basis under the lease and sublease agreements.

Major Rating Factors

Strengths

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