MARC has assigned its rating of A+_IS(s) to Projek Lintasan Sungai Besi-Ulu Klang Sdn Bhd’s (PLSUKE) Sukuk Wakalah Programme (Sukuk Wakalah) of up to RM2.0 billion. Concurrently, MARC has also assigned its rating of AAA_IS(fg) to PLSUKE’s Danajamin-Guaranteed Facilities (Danajamin-Guaranteed Sukuk) of up to RM500.0 million. The outlook on both ratings is stable.

PLSUKE is wholly owned by Projek Lintasan Kota Holdings Sdn Bhd (PROLINTAS) which in turn is 100%-owned by Permodalan Nasional Berhad (PNB), a government-linked investment company. The assigned rating on the Sukuk Wakalah is underpinned by credit substitution from PROLINTAS in the form of (i) an unconditional and irrevocable corporate guarantee to meet all principal and profit payments in addition to funding any shortfall in the finance service reserve account (FSRA) and/or finance payment account (FPA); and (ii) an unconditional and irrevocable completion guarantee during the construction period to fund any project cost overruns in addition to meeting any shortfall in the initial prefunding of the FSRA on the scheduled project completion date and any shortfall in the FPA.

MARC maintains an issuer rating of A+/Stable on PROLINTAS based on the company’s track record as one of the leading domestic highway developers and operator of four matured highways. The rating of PROLINTAS benefits from a one-notch uplift on the high likelihood of parental support from PNB.

PLSUKE is undertaking the design, construction, operations, maintenance, toll collection and financing of the Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) under a concession agreement with the Malaysian government. The concession tenure is 55 years starting from December 25, 2014 with a conditional extension of another 10 years. The project cost is estimated at RM7.55 billion with a 79:21 debt-equity ratio and the construction period runs over 48 months with tolling operations commencing on September 1, 2020. The financing comprises proceeds raised under the (i) Sukuk Wakalah; (ii) Danajamin-Guaranteed Sukuk; (iii) Syndicated Islamic Term Facilities of RM2.2 billion and (iv) a Government Support Financing of RM1.778 billion, all of which rank pari passu in terms of priority of payment and security.

The stable outlook on the Sukuk Wakalah is based on the assumptions that (i) PROLINTAS will maintain a satisfactory credit profile and receive continued support from PNB and (ii) construction of SUKE will progress in line with schedule and budget. The rating and outlook on the Danajamin-Guaranteed Sukuk reflect MARC’s insurer financial strength rating of AAA/Stable on Danajamin.

Contacts:
Adib Asilah, +603-2717 2943/ asilah@marc.com.my;
David Lee, +603-2717 2955/ david@marc.com.my.