Published on 23 September 2013
RAM Ratings has reaffirmed the
AA2/stable/- ratings of Lingkaran Trans Kota Sdn Bhd’s (“Litrak” or “the
Company”) Sukuk Musyarakah Islamic Medium-Term Notes I Programme of up to
RM1.15 billion (2008/2023) and Sukuk Musyarakah Islamic Medium-Term Notes II Programme
of up to RM300 million (2008/2023) (collectively referred to as “the Sukuk”).
Litrak is the toll concessionaire for the 40-km Lebuhraya Damansara-Puchong
(“LDP” or “the Highway”) until 14 August 2030.
The ratings reflect the LDP’s
strong traffic profile, underscored by its strategic alignment straddling
densely populated areas, as well as Litrak’s robust debt-coverage level.
Following the completion of upgrading works along the LDP, the Highway
registered a healthier traffic growth of 3.07% y-o-y in fiscal 2013 (fiscal
2012: 0.42%), with average daily traffic of 461,315. Nonetheless, proposed new
roads announced under the Tenth Malaysia Plan, the upgrading of competing roads
and changes in the transportation system may pose a threat to the Highway’s
longer-term traffic demand. Elsewhere, as with most concession-related
projects, the Company is exposed to regulatory and single-project risks.
Looking ahead, our sensitised
cashflow analysis projects the Company’s debt-servicing indicators to come in strong,
on the back of an annual average pre-financing cashflow of RM260 million. Our
assessment assumes that Litrak will be circumspect in distributions to its
shareholder, and that it will meet a minimum finance service coverage ratio
(with cash balances, post-distribution and calculated on principal repayment
dates) of 2 times throughout the tenure of the Sukuk.
Media contact
Chin Wynn
(603) 7628 1170
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