CREDIT ANALYSIS REPORT

AMAN SUKUK BERHAD - 2021

Report ID 60538900393 Popularity 82 views 29 downloads 
Report Date Nov 2021 Product  
Company / Issuer Aman Sukuk Bhd Sector Property
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Rationale
Rating action     
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. 

Rationale      
The rating affirmation reflects the credit strength of the Malaysian government as the sole obligor of the annual sublease rental payments, the quantum of which is deemed sufficient to meet the principal repayments and profit payments under the IMTN programme on a timely basis. 

Aman is a wholly-owned funding vehicle of PBLT Sdn Bhd, the developer of 74 projects comprising quarters and facilities for Polis Diraja Malaysia (PDRM). The projects were undertaken under a build, lease and transfer (BLT) model. Upon completion of each project, PBLT entered into irrevocable lease and sublease agreements with the Malaysian government. 

The IMTNs were issued in seven independent series, proceeds of which were used to acquire the rights to entitle sublease rental receivables of the said projects from PBLT. The sublease rental payments were structured to meet the repayment schedule of each series for the IMTNs issued. As at end-August 2021, cash balance in the security accounts stood at RM1.7 billion. It is sufficient to meet the profit payments of RM23.6 million in November 2021 and IMTN redemptions of RM610.0 million (under Series 3, 4, and 7) throughout 2022. The outstanding IMTN under the rated programme stood at RM3.22 billion as at October 26, 2021.

Rating outlook     
The stable outlook reflects our expectation that the steady sublease rental payments from the Malaysian government will continue on a timely basis. 

Rating trajectory

Downside scenario     
Rating and/or outlook could face pressure in the event that PBLT faces any untimely receipt of sublease payments from the government that would reduce the cash balance to meet the sukuk repayments.

Key strengths

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


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