MARC affirms ‘AAA’ rating for Aman Sukuk’s RM10b IMTN

The Malaysian Rating Corp Bhd (MARC) has affirmed its ‘AAA’ rating on special purpose vehicle Aman Sukuk Bhd’s (Aman) Islamic medium-term notes (IMTN) programme of up to RM10 billion with a stable outlook. MARC said the rating reflects the credit strength of the government as the sole paymaster of the sublease rental payments that are sufficient to meet the principal and profit payments under the IMTN programme.
In the statement the rating agency added the stable outlook reflects its expectations that the sublease rental stream backing the transaction will continue to be supported by timely receipt of payments from the government.
Aman is a wholly owned funding vehicle of Pembinaan BLT Sdn Bhd (PBLT), the developer of 74 projects comprising quarters and facilities for the Polis DiRaja Malaysia. The projects, which are located throughout the country, were developed under a build, lease and transfer (BLT) project model. As at end of August 2016, PBLT has fully completed the construction of the 74 projects with a value of RM7.5 billion, of which 73 projects have been awarded with certificates of completion and compliance (CCC).
Aman redeemed RM150 million (series 1) and RM130 million (series 5) notes in February and March 2016 respectively; the redemption of another RM185 million (series 2) will fall due in October this year. MARC noted that the current cash balance of RM2 billion in the company’s security accounts as at end of August 2016 will be sufficient to meet the scheduled payments for the next three years under each series of issuance.