Monday, Nov 10, 2003
MARC has reaffirmed the ratings of Petronas Assets Sdn Bhd’s Bai Al-Dayn Notes Issuance Facility with a nominal value of RM282 million at AAAID (Triple AAA, Islamic Debt) and Al-Murabahah Commercial Papers/Medium Term Notes (CP/MTN) Programme with a nominal value of up to RM500 million at MARC-1ID/AAAID. The reaffirmation of the ratings reflects the credit strength of Petroliam Nasional Berhad (“PETRONAS”); the user of specific assets belonging to Petronas Assets Sdn Bhd (PAssets) and the obligor of the Promissory Notes (PNs) and Asset Utilisation Fee (AUF). Payments arising from the PNs and AUF form the primary source of repayment of the Bai Al-Dayn Notes and Al-Murabahah Commercial Papers/Medium Term Notes (CP/MTN) respectively.
PETRONAS’ credit strength is superior and is drawn from its robust cash flow generation that is supported by a favourable production profile, strong profitability measures, sound capital structure and its strategic role in the Malaysian economy.
PAssets is a wholly owned subsidiary of PETRONAS and is in the business of owning and leasing of assets. The company acquired and subsequently granted an exclusive right of use of certain assets located at PETROSAINS Discovery Centre (Petrosains) and Tower 1 of the PETRONAS Twin Towers (Tower1) to PETRONAS. In consideration for this exclusive right, PETRONAS has issued PNs for Petrosains and agreed to pay AUF for Tower1.
PAssets’ revenue nearly doubled to RM216.1 million in FY2003 from RM120.2 million in FY2002 following the commencement of the rental payments for Tower1 in February 2002. Consequently, the company’s pre-tax profit tripled to RM42.3 million from RM14.8 million previously.
As operating and maintenance costs are borne directly by PETRONAS, the company was able to keep its operating cost at a minimum level. Hence, the company’s operating margin was considerably strong at 28.9% in FY2003 (FY2002:20.2%). The company’s cash flow protection measures were equally strong with its finance service coverage ratio (FSCR before investing and financing) at 3.5 times and cash flow interest coverage at 8.3 times in FY2003 (FY2002:7.9 times).
The outstanding limit of the Bai Al-Dayn and CP/MTN facility currently stands at RM202 million and RM410 million respectively. Going forward, PAssets debt leverage is expected to decline in tandem with the gradual repayment of the notes.
PETRONAS’ credit strength is superior and is drawn from its robust cash flow generation that is supported by a favourable production profile, strong profitability measures, sound capital structure and its strategic role in the Malaysian economy.
PAssets is a wholly owned subsidiary of PETRONAS and is in the business of owning and leasing of assets. The company acquired and subsequently granted an exclusive right of use of certain assets located at PETROSAINS Discovery Centre (Petrosains) and Tower 1 of the PETRONAS Twin Towers (Tower1) to PETRONAS. In consideration for this exclusive right, PETRONAS has issued PNs for Petrosains and agreed to pay AUF for Tower1.
PAssets’ revenue nearly doubled to RM216.1 million in FY2003 from RM120.2 million in FY2002 following the commencement of the rental payments for Tower1 in February 2002. Consequently, the company’s pre-tax profit tripled to RM42.3 million from RM14.8 million previously.
As operating and maintenance costs are borne directly by PETRONAS, the company was able to keep its operating cost at a minimum level. Hence, the company’s operating margin was considerably strong at 28.9% in FY2003 (FY2002:20.2%). The company’s cash flow protection measures were equally strong with its finance service coverage ratio (FSCR before investing and financing) at 3.5 times and cash flow interest coverage at 8.3 times in FY2003 (FY2002:7.9 times).
The outstanding limit of the Bai Al-Dayn and CP/MTN facility currently stands at RM202 million and RM410 million respectively. Going forward, PAssets debt leverage is expected to decline in tandem with the gradual repayment of the notes.