Published on 21 October 2014
RAM Ratings has reaffirmed the
AA2/Stable ratings of Lingkaran Trans Kota Sdn Bhd’s (Litrak or the Company)
Sukuk Musharakah Medium-Term Notes I and II Programmes (2008/2023) with a
combined value of up to RM1.45 billion. Litrak holds the concession 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.
The Highway registered lower traffic
growth of 1.22% y-o-y in fiscal 2014 (fiscal 2013: 3.07%) with average daily
traffic of 466,929, partly due to ongoing construction in surrounding areas
that affected traffic flow. Nonetheless, proposed new toll roads, the upgrading
of competing roads and changes in the transportation system may pose a threat
to the LDP’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 RM236 million. Our
assessment assumes 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
Cheong Kah Weng
(603) 7628 1113
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