Tuesday, Mar 30, 2004
MARC has assigned a long term rating of AAAID to Putrajaya Holdings Sdn Bhd’s (PJH) proposed RM1,500 million Murabahah Notes Issuance Facility comprising Medium Term Notes. The Islamic debt rating reflects PJH’s issuer rating, based upon its solid capitalization supported by a superior set of shareholders, exceptional financial flexibility and importance of the company in the development of Putrajaya.
PJH is responsible for the development of Putrajaya. Under the Putrajaya Master Plan, the Government Administration Centre is to be developed into 20 precincts under three phases; phases 1A, 1B and 2. The construction of Phase 1 Government Buildings on a privatized basis by PJH is covered under a Concession Agreement (CA) entered into with the Government. The agreement for Phase 2 Government Buildings is currently being negotiated, even though the construction of these buildings is well under way. Nevertheless, the new agreement is expected to mirror the previous CA where upon completion of the buildings, PJH will sub-lease the land and buildings to the Government for a period of 25 years in return for a specified rental stream.
Proceeds from the Medium Term Notes Programme will be utilised to repay bank borrowings and the balance to part finance the development of Putrajaya excluding Phase 1 of the Government Buildings. Liquidity risk is mitigated since the funding for the redemption of the facility will be provided by rental income from Government buildings housing three ministries namely Ministry of Agriculture, Ministry of Land and Cooperative Development and Ministry of Youth & Sports and the Putrajaya Convention Centre. Except for the Putrajaya Convention Centre, these buildings are currently under construction and are nearing completion. Given the advanced stage of construction works and experience of the selected contractors, MARC believes that construction and completion risks are significantly reduced.
Revenue in FY2003 increased marginally to RM642.5 million (FY2002: 626.6 million) on the back of an increase in contributions from the sale of properties and rentals from sub-lease of buildings. Coupled with a significant increase in share of profits from associated companies, PJH’s pre-tax profit doubled to RM136.3 million in FY2003. Capitalization remains solid backed by RM2.45 billion of shareholders’ funds. While the debt leverage ratio is expected to increase upon the issuance of the Medium Term Notes under the MUNIF, it remains manageable and below the cap of 4.0x imposed under the issue structure.
PJH’s exceptionally strong financial flexibility is drawn from the strength of its shareholders, namely, PETRONAS and Khazanah Nasional Bhd.
PJH is responsible for the development of Putrajaya. Under the Putrajaya Master Plan, the Government Administration Centre is to be developed into 20 precincts under three phases; phases 1A, 1B and 2. The construction of Phase 1 Government Buildings on a privatized basis by PJH is covered under a Concession Agreement (CA) entered into with the Government. The agreement for Phase 2 Government Buildings is currently being negotiated, even though the construction of these buildings is well under way. Nevertheless, the new agreement is expected to mirror the previous CA where upon completion of the buildings, PJH will sub-lease the land and buildings to the Government for a period of 25 years in return for a specified rental stream.
Proceeds from the Medium Term Notes Programme will be utilised to repay bank borrowings and the balance to part finance the development of Putrajaya excluding Phase 1 of the Government Buildings. Liquidity risk is mitigated since the funding for the redemption of the facility will be provided by rental income from Government buildings housing three ministries namely Ministry of Agriculture, Ministry of Land and Cooperative Development and Ministry of Youth & Sports and the Putrajaya Convention Centre. Except for the Putrajaya Convention Centre, these buildings are currently under construction and are nearing completion. Given the advanced stage of construction works and experience of the selected contractors, MARC believes that construction and completion risks are significantly reduced.
Revenue in FY2003 increased marginally to RM642.5 million (FY2002: 626.6 million) on the back of an increase in contributions from the sale of properties and rentals from sub-lease of buildings. Coupled with a significant increase in share of profits from associated companies, PJH’s pre-tax profit doubled to RM136.3 million in FY2003. Capitalization remains solid backed by RM2.45 billion of shareholders’ funds. While the debt leverage ratio is expected to increase upon the issuance of the Medium Term Notes under the MUNIF, it remains manageable and below the cap of 4.0x imposed under the issue structure.
PJH’s exceptionally strong financial flexibility is drawn from the strength of its shareholders, namely, PETRONAS and Khazanah Nasional Bhd.