Friday, Jan 27, 2006
MARC has reaffirmed Putrajaya Holdings Sdn Bhd’s (PJH) long term and short term issuer rating of AAA and MARC-1 respectively and its Islamic corporate debt ratings of AAAID/MARC-1ID in respect of its RM765 million Bai’ Bithaman Ajil Bonds Issuance Facilities (BBA) (Parcels A, B & Public Facilities Precinct 10); RM570 million BBA (Parcel C); RM850 million BBA (Parcel D); RM850 million BBA (Wisma Putra, Deputy Prime Minister’s Residence (DPMR) and Ministry of Finance Complex (MOF)); RM910 million Murabahah Commercial Papers/Medium Term Notes (CP/MTN) Programme (Parcel E) and RM1,500 million Murabahah Notes Issuance Facility (MUNIF) (Precinct 4G1-4G4 & Putrajaya Convention Centre (PCC)). The reaffirmation of PJH’s issuer and Islamic debt ratings are based on PJH’s solid capitalization underlined by the strong set of shareholders and the exceptionally strong financial flexibility. Notwithstanding, it is complemented by the strength of the issue structures where the repayments of the corporate debt securities are secured by specific take out sources in the form of assigned sub-lease rental income in respect of specific/identified Government buildings that form the primary source of repayment for the Islamic debt securities issued by the company.
The rating of AAAID for the BBA bonds facilities reflects the credit of the Government; as the source of repayment are secured against the sub-lease rental payments in respect of completed Government buildings under Parcels A, B, Public Facilities Precinct 10; Parcels C & D and Parcels Wisma Putra, the DPMR and the MOF. Under the issue structure, the sub-lease rental income streams will be captured in designated accounts where it will solely be utilised for the payments of primary and secondary bonds, affording a high degree of stability and predictability to the issue specific cash flows. The progressive reduction of the debts in a serial manner over the tenure of the Facilities significantly mitigates refinancing risk.
Currently, only the Government buildings under Parcel E and Precincts 4G3, 4G4 & PCC do not have sub-lease agreements, therefore, the RM910 million Murabahah CP/MTN programme and RM1,500 million MUNIF reflect the credit risk of PJH which carries an issuer rating of AAA/MARC-1. As at November 2005, the construction works for all sections under Parcel E were fully completed and the Certificates of Practical Completion (CPC) have been issued with the exception of sub parcel Block E7. The balance of the CPCs are expected to be issued by January 2006. Upon the issuance of the CPCs, the sub-lease agreements will be executed and the rental proceeds shall be assigned toward the redemption of the CP/MTN programme.
Under the RM1,500 million MUNIF, construction works are fully completed eliminating the risk of construction and completion. The facility is essentially unsecured, nevertheless, PJH has pledged not to create any encumbrance over any rights, interest or title in respect of the Government buildings under Precincts 4G1 to 4G4 and PCC without prior approval from the trustee save and except upon the full redemption of the facility.
PJH reported significant improvement in its revenue in FY2005 to approximately RM1,319 million and this has attributed mainly to the increased progress billings from the government quarters and steady rental contributions from the sub-lease of Government buildings. Following the drawdown of the proposed RM2.2 billion Murabahah Islamic Medium Term Notes out of which RM1.6 billion is expected to be drawndown in 2006, PJH’s proforma debt equity level (equity level is based on FY2005’s audited results) is expected to be 3.17x; still 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 (KLCC (Holdings) Berhad and Khazanah) and an unutilised revolving credit of RM716.0 million as at 30 November 2005.
The rating of AAAID for the BBA bonds facilities reflects the credit of the Government; as the source of repayment are secured against the sub-lease rental payments in respect of completed Government buildings under Parcels A, B, Public Facilities Precinct 10; Parcels C & D and Parcels Wisma Putra, the DPMR and the MOF. Under the issue structure, the sub-lease rental income streams will be captured in designated accounts where it will solely be utilised for the payments of primary and secondary bonds, affording a high degree of stability and predictability to the issue specific cash flows. The progressive reduction of the debts in a serial manner over the tenure of the Facilities significantly mitigates refinancing risk.
Currently, only the Government buildings under Parcel E and Precincts 4G3, 4G4 & PCC do not have sub-lease agreements, therefore, the RM910 million Murabahah CP/MTN programme and RM1,500 million MUNIF reflect the credit risk of PJH which carries an issuer rating of AAA/MARC-1. As at November 2005, the construction works for all sections under Parcel E were fully completed and the Certificates of Practical Completion (CPC) have been issued with the exception of sub parcel Block E7. The balance of the CPCs are expected to be issued by January 2006. Upon the issuance of the CPCs, the sub-lease agreements will be executed and the rental proceeds shall be assigned toward the redemption of the CP/MTN programme.
Under the RM1,500 million MUNIF, construction works are fully completed eliminating the risk of construction and completion. The facility is essentially unsecured, nevertheless, PJH has pledged not to create any encumbrance over any rights, interest or title in respect of the Government buildings under Precincts 4G1 to 4G4 and PCC without prior approval from the trustee save and except upon the full redemption of the facility.
PJH reported significant improvement in its revenue in FY2005 to approximately RM1,319 million and this has attributed mainly to the increased progress billings from the government quarters and steady rental contributions from the sub-lease of Government buildings. Following the drawdown of the proposed RM2.2 billion Murabahah Islamic Medium Term Notes out of which RM1.6 billion is expected to be drawndown in 2006, PJH’s proforma debt equity level (equity level is based on FY2005’s audited results) is expected to be 3.17x; still 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 (KLCC (Holdings) Berhad and Khazanah) and an unutilised revolving credit of RM716.0 million as at 30 November 2005.