CREDIT ANALYSIS REPORT

AMAN SUKUK BERHAD - 2019

Report ID 5981 Popularity 133 views 35 downloads 
Report Date Aug 2019 Product  
Company / Issuer Aman Sukuk Bhd Sector Property
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Rationale

MARC has affirmed its AAAIS 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 RM4.25 billion as at July 31, 2019.

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 PBLT Sdn Bhd (formerly known as Pembinaan BLT Sdn Bhd). Aman is a wholly-owned funding vehicle of PBLT for the said developments which were undertaken on a build, lease and transfer (BLT) model. Following the completion of each development, 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 said developments from PBLT. The sublease rentals were structured to meet the repayment profile of each series for the IMTNs issued. As at end-May 2019, the cash balance in Aman’s security accounts of about RM1.6 billion is more than sufficient to meet the scheduled principal repayment of RM110.0 million IMTN under Series 4 (paid in July 2019) and the remaining coupon payment amounting to RM117.4 million for the year. Meanwhile a total of RM180.0 million IMTN under Series 5 and 7 will mature in 2020.

The stable outlook reflects MARC’s expectation 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 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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