RAM Ratings reaffirms AAA(s) rating of KLIA Berhad’s Islamic Notes Facility

Published on 12 November 2012

RAM Ratings has reaffirmed the enhanced AAA(s) rating of KL International Airport Berhad’s (“KLIA Berhad” or “the Company”) RM4.06 billion Bai’ Bithaman Ajil Notes Issuance Facility (2003/2015) (“KLIA Notes Facility”), with a stable outlook. The enhanced rating is premised on the unconditional and irrevocable guarantee by the Government of Malaysia (“GoM”) to repay all amounts due under the KLIA Notes Facility.

Incorporated on 29 May 1993, KLIA Berhad is wholly owned by the GoM via the Ministry of Finance (Incorporated) (“MoF”). The Company had been set up as a conduit for the GoM to fund the construction and development of Kuala Lumpur International Airport (“KLIA”).

Upon the completion of KLIA in 1998, the ownership and all outstanding liabilities of the airport had been transferred to the MoF. In 1999, however, the GoM advised the Company to reinstate the outstanding liabilities in relation to the construction of the airport. Since then, KLIA Berhad has been responsible for the repayment of all outstanding liabilities, including the KLIA Notes Facility; the MoF undertakes to provide all the necessary funding to settle these commitments.

KLIA Berhad is an operationally dormant company; its income is solely derived from dividends on its investments in unit trusts and interest earned on deposits in financial institutions. The Company’s expenses are minimal and mainly comprise rental payments, legal charges, management fees and company secretarial fees. As at end-June 2012, the outstanding amount under the KLIA Notes Facility stood at RM1.56 billion.

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Woon Tien Ern

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tienern@ram.com.my