tag:blogger.com,1999:blog-57828428484982746252024-02-07T20:38:34.016+08:00My One AcademyThe Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.comBlogger12176125tag:blogger.com,1999:blog-5782842848498274625.post-56662146720615788522019-01-18T11:37:00.000+08:002019-01-18T11:38:01.962+08:00FW: RAM Ratings reaffirms Besraya’ sukuk rating, maintains negative outlook<div class="WordSection1"> <p><em><b><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Published on</span></b></em><em><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"> 18 Jan 2019.</span></em><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"><o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">RAM Ratings has reaffirmed the AA3/Negative rating of Besraya (M) Sdn Bhd's (Besraya or the Company) RM700 million <em><span style="font-family:"Verdana",sans-serif">Sukuk Mudharabah</span></em> Issuance Facility (2011/2028). The negative outlook reflects our ongoing concerns about the Company's higher than expected dividend distributions, which may deteriorate its debt-servicing indicators. Following Besraya's hefty RM70 million dividend payout in FY Mar 2018, its resultant projected finance service coverage ratio (FSCR, with cash balances, post-distribution) under RAM's sensitised case suggests no headroom for further distributions and/or underperformance in its cash-generating ability, in order to maintain the FSCR threshold of 2 times for AA3-rated transactions. The negative outlook will be maintained until the Company is able to display a consistent track record of financial discipline. Meanwhile, on the Sukuk's latest principal repayment date of 28 July 2018, the Company's FSCR (with cash balances, post-distribution) of 2.43 times was slightly higher than our expectation, largely due to traffic outperformance at the Loke Yew plaza. Given that the Company is currently constructing Kuchai Link 2, which will necessitate sizeable capex over the next two years, cash retention will have to be prioritised during this period.<o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">The reaffirmation of the rating is based on Besraya's stable earnings and cashflow-generating ability, underpinned by the established traffic profile of the Sungai Besi Highway and the Besraya Eastern Extension (collectively known as "the Highways"). The Highways registered an average daily traffic (ADT) of 156,100 vehicles and a 3.8% y-o-y ADT growth in FY Mar 2018, attributable to the steady increase in traffic volume by 11.8% y-o-y at the Loke Yew toll plaza. That said, the ADT for the Mines toll plaza contracted 1.0% y-o-y in the same period, due to the availability of alternative routes. As such, we have assumed that Besraya's last toll-rate hike will take place in 2020 (originally scheduled for 1 January 2018), with a 4.0% contraction in the Highway's traffic volume. Thereafter, traffic growth is anticipated to recover at an average of 1.3% per annum throughout the remaining tenure of the Sukuk.<o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Should the tariff hike be deferred, Besraya's debt-servicing capacity would be compromised if the Company were not fully compensated through cash payments. We note that the Government of Malaysia (GoM) has discharged its compensation obligations despite some delay. We believe the GoM will continue honouring the compensation arrangement in the event of non-revision of toll rates, as can be observed to date. <o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Similar to other toll-road projects, Besraya is inherently exposed to regulatory and single-project risks.<o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"> <o:p></o:p></span></p> <p style="text-align:justify"><strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Analytical contact</span></strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"><br> Ong Ju Laine<br> (603) 7628 1183<br> <a href="mailto:julaine@ram.com.my">julaine@ram.com.my</a><o:p></o:p></span></p> <p style="text-align:justify"><strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Media contact</span></strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <div style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in"> <p class="MsoNormal"><span lang="EN-MY"><o:p> </o:p></span></p> </div> <p class="MsoNormal"><span lang="EN-MY"><o:p> </o:p></span></p> <p class="MsoNormal"><span lang="EN-MY"><o:p> </o:p></span></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-17376358816725938512018-12-24T10:55:00.001+08:002018-12-24T10:55:29.184+08:00FW: RAM Ratings reaffirms Maybank’s AAA ratings<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 21 Dec 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has reaffirmed Malayan Banking Berhad's (Maybank or the Group) respective ASEAN and Malaysian national-scale financial institution ratings at seaAAA/Stable/seaP1 and AAA/Stable/P1. Concurrently, the ratings of all the Group's debt issues have been reaffirmed. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Maybank is the fourth-largest bank by assets in ASEAN. The reaffirmation of Maybank's ratings reflects the Group's strong ASEAN franchise, solid capitalisation, diversified earnings base and deposit funding strength in Malaysia. As the largest bank in Malaysia, Maybank is systemically important to the country. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">While pressure on the Group's asset quality lingers, the credit quality of its loan portfolio is expected to hold up. Its gross impaired loan (GIL) ratio had weakened to 2.7% as at end-September 2018, mainly due to a large collateralised loan in Singapore in 2Q FY Dec 2018. On a positive note, the inflow of impaired oil and gas (O&G) accounts, which had contributed to a rise in the Group's GIL ratio in 2016, has slowed. Maybank recorded a respective 31% and 15% y-o-y reduction in impairment losses in fiscal 2017 and 9M fiscal 2018, translating into an annualised credit cost ratio of 0.4%. This is a notable improvement from the 0.6% seen in fiscal 2016 when Maybank had actively managed the rescheduling and restructuring of borrowers in the O&G and related sectors, and borne the necessary provisions. That said, increasing interest rates and uncertainties arising from the upcoming presidential election in Indonesia, the challenging outlook for the power sector in Singapore and the ongoing trade war between the US and China could introduce some stress to asset quality.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Maybank recorded a pre-tax profit of RM10.0 billion in fiscal 2017 (9M fiscal 2018: RM7.8 billion). Its profit performance is improving on account of easing credit costs and should support internal capital generation. Taking into consideration RM2.8 billion of regulatory reserves as at end-September 2018, the Group's adjusted GIL coverage ratio stood healthy at 99%. Meanwhile, Maybank's common equity tier-1 capital ratio was a solid 13.6% as at the same date.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Table 1: Maybank's issue ratings</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" width="576" style="width:6.0in"> <tbody> <tr style="height:10.5pt"> <td width="438" style="width:328.5pt;padding:0in 0in 0in 0in;height:10.5pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> <td width="138" style="width:103.5pt;padding:0in 0in 0in 0in;height:10.5pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Rating/Outlook</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr style="height:12.75pt"> <td width="576" colspan="2" style="width:6.0in;padding:0in 0in 0in 0in;height:12.75pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> Maybank</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr style="height:13.5pt"> <td width="438" style="width:328.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> RM3.0 billion Subordinated Note Programme (2011/2031)<o:p></o:p></span></p> </td> <td width="138" style="width:103.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AA<sub>1</sub>/Stable<o:p></o:p></span></p> </td> </tr> <tr style="height:13.5pt"> <td width="438" style="width:328.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> RM20.0 billion Subordinated Note Programme (2012/2112)<o:p></o:p></span></p> </td> <td width="138" style="width:103.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AA<sub>1</sub>/Stable<o:p></o:p></span></p> </td> </tr> <tr style="height:13.5pt"> <td width="438" style="width:328.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> RM10.0 billion Additional Tier-1 Capital Securities Programme (2014/2114)<o:p></o:p></span></p> </td> <td width="138" style="width:103.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AA<sub>3</sub>/Stable<o:p></o:p></span></p> </td> </tr> <tr style="height:13.5pt"> <td width="438" style="width:328.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> RM10.0 billion Senior and Subordinated Sukuk Murabahah Programme (2015/2117)<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> - Senior<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> - Subordinated<o:p></o:p></span></p> </td> <td width="138" style="width:103.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AA<sub>1</sub>/Stable<o:p></o:p></span></p> </td> </tr> <tr style="height:13.5pt"> <td width="438" style="width:328.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> RM10.0 billion Commercial Paper/Medium Term Note Programme (2016/2023)<o:p></o:p></span></p> </td> <td width="138" style="width:103.5pt;padding:0in 0in 0in 0in;height:13.5pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable/P1<o:p></o:p></span></p> </td> </tr> </tbody> </table> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <i><span style="font-size:8.5pt;font-family:"Times New Roman",serif">Note: Maybank has redeemed and subsequently terminated the RM4.0 billion Innovative Tier-1 Capital </span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <i><span style="font-size:8.5pt;font-family:"Times New Roman",serif">Securities Programme (2008/2073) in September 2018</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact </span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <br> Chan Yin Huei <br> (603) 7628 1180 <br> <a href="mailto:yinhuei@ram.com.my">yinhuei@ram.com.my</a> <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-70854693103604956962018-12-24T10:03:00.001+08:002018-12-24T10:03:48.719+08:00FW: AAM News: Bond ETFs drawing more institutional investors, Van Eck says <div class="WordSection1"> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"> <o:p></o:p></p> <div align="center"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="716" style="width:537.0pt"> <tbody> <tr> <td width="716" style="width:537.0pt;padding:0in 0in 0in 0in"> 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width="710" style="width:532.5pt"> <tbody> <tr style="height:24.0pt"> <td width="440" style="width:330.0pt;background:#03419A;padding:0in 0in 0in 12.0pt;height:24.0pt"> <p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:white;letter-spacing:.1pt"><span style="color:white">Latest News</span></span></b><b><span style="font-size:9.0pt;font-family:"Times New Roman",serif;color:white;letter-spacing:.1pt"><span style="color:white"><o:p></o:p></span></span></b></p> </td> <td width="200" style="width:150.0pt;background:#03419A;padding:0in 12.0pt 0in 0in;height:24.0pt"> <p class="MsoNormal" align="right" style="text-align:right"><i><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:white;letter-spacing:.1pt"><span style="color:white">24 December 2018</span></span></i><i><span style="font-size:9.0pt;font-family:"Times New Roman",serif;color:white;letter-spacing:.1pt"><span style="color:white"><o:p></o:p></span></span></i></p> </td> </tr> 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target="_blank"><span style="text-decoration:none"><img border="0" width="150" height="150" style="width:1.5625in;height:1.5625in" id="_x0000_i1027" src="http://u2.ufosend.com/files/uploads/a/asiaasset/images/Bond_ETF.jpg" alt="Bond ETFs drawing more institutional investors, Van Eck says "></span></a><o:p></o:p></p> </td> <td width="290" style="width:217.5pt;background:#666666;padding:0in 11.25pt 0in 11.25pt;height:112.5pt"> <p class="MsoNormal"><b><span style="font-size:15.0pt;color:white"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=766&batch_id=1552&rs=1&s_lang=&post_datetime=20181224070013&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/Bond_ETFs_1221.aspx" target="_blank"><span style="font-family:"Times New Roman",serif;color:white;text-decoration:none">Bond ETFs drawing more institutional investors, Van Eck says </span></a></span></b><br> <br> <i><span style="font-size:9.0pt;font-family:"Times New 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href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=766&batch_id=1552&rs=1&s_lang=&post_datetime=20181224070013&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/PEblog7_Dec_1207.aspx" target="_blank">PE Panorama: Don't bet heavily on IPO exits for private equity-backed firms </a></span><span style="color:#838383"><br> <br> </span><span style="font-size:10.5pt;font-family:"Times New Roman",serif;color:navy"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=766&batch_id=1552&rs=1&s_lang=&post_datetime=20181224070013&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/Korea_KIC_1207.aspx" target="_blank">Korea's KIC hires manager for first ESG mandate, adopts responsible investing rules </a> </span><span style="color:#838383"><o:p></o:p></span></h4> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> </td> <td width="203" valign="top" 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For enquiries please contact us at </span><span style="font-size:7.5pt;font-family:"Arial",sans-serif">(852) </span> <span style="font-size:7.0pt;font-family:"Arial",sans-serif">2547-7331.</span><o:p></o:p></p> </td> <td width="4" style="width:3.0pt;padding:.75pt .75pt .75pt .75pt;height:27.0pt"> <p class="MsoNormal"> <o:p></o:p></p> </td> </tr> <tr style="height:39.0pt"> <td width="6" style="width:4.5pt;padding:.75pt .75pt .75pt .75pt;height:39.0pt"> <p class="MsoNormal"> <o:p></o:p></p> </td> <td width="698" valign="top" style="width:523.5pt;padding:.75pt .75pt .75pt .75pt;height:39.0pt"> <p class="MsoNormal"><span style="font-size:8.0pt"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=766&batch_id=1552&rs=1&s_lang=&post_datetime=20181224070013&email=meor@bpam.com.my&to_url=http://u2.ufosend.com/emarketing/res/edm_unsubscribe.php" target="_blank"><span style="font-family:"Arial",sans-serif">Unsubscribe to this mailing list</span></a></span><br> <br> <span style="font-size:8.0pt;font-family:"Arial",sans-serif;color:#888888">COPYRIGHT © 2018 ASIA ASSET MANAGEMENT. ALL RIGHTS RESERVED.</span><span style="font-size:8.0pt;color:#888888"><br> </span><span style="font-size:8.0pt;font-family:"Arial",sans-serif;color:#888888">1701 Singga Commercial Centre, 148 Connaught Road West, Hong Kong Tel: (852) 2547-7331 E-mail: </span><span style="font-size:8.0pt;color:#888888"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=766&batch_id=1552&rs=1&s_lang=&post_datetime=20181224070013&email=meor@bpam.com.my&to_url=mailto:enquiries@asiaasset.com" target="blank">enquiries@asiaasset.com</a></span><o:p></o:p></p> </td> <td width="4" style="width:3.0pt;padding:.75pt .75pt .75pt .75pt;height:39.0pt"> <p class="MsoNormal"><br> <o:p></o:p></p> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> </div> </td> </tr> </tbody> </table> </div> <p class="MsoNormal"><span style="display:none"><o:p> </o:p></span></p> <table class="MsoNormalTable" border="0" cellpadding="0" width="100%" style="width:100.0%"> <tbody> <tr> <td style="padding:.75pt .75pt .75pt .75pt"> <p class="MsoNormal" align="center" style="text-align:center"><img border="0" id="edm_read" src="http://u2.ufosend.com/emarketing/res/edm_read.php?cn=asiaasset&campaign_id=766&batch_id=1552&post_datetime=20181224070013&rs=1&s_lang=&recipient=meor@bpam.com.my"><o:p></o:p></p> </td> </tr> </tbody> </table> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-19068379281308555942018-12-03T11:08:00.001+08:002018-12-03T11:08:48.351+08:00FW: RAM Ratings reaffirms Sarawak Hidro’s AAA/Stable rating<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><o:p> </o:p></b></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 30 Nov 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has reaffirmed the AAA/Stable rating of Sarawak Hidro Sdn Bhd's (Sarawak Hidro or the Company) RM5.54 billion <i>Sukuk Murabahah</i> (2016/2031). The rating reflects the Company's superior finance service coverage ratio (FSCR, with cash balances, post-distribution, calculated on payment dates) of 2 times throughout the Sukuk's tenure – a level commensurate with an AAA rating under RAM's project-finance rating framework. This is supported by the Government of Malaysia's (GoM) continued commitment to top up any shortfall in cashflow in relation to the targeted FSCR of 2 times throughout the life of the Sukuk. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The irrevocable and unconditional liquidity support from the GoM is articulated through a strongly worded letter of undertaking (LoU) from the Minister of Finance (Incorporated) (MoF). The LoU remains in force despite changes in the Company's shareholding; Sarawak Energy Berhad (SEB, rated AA1/Positive), via its 100%-owned subsidiary, SEB Power Sdn Bhd (SEB Power), fully acquired Sarawak Hidro from the MoF on 16 August 2017.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Following the acquisition of Sarawak Hidro by SEB, the Company's debt-servicing ability has improved substantially, thanks to stronger dispatch demand and full payments received in accordance with the take-or-pay arrangement under its power purchase agreement with Syarikat SESCO Berhad (SESCO) – a wholly owned subsidiary of SEB and the sole off-taker of the Company's electricity output. Sarawak Hidro's FSCR stood at a robust 5.28 times as at the last repayment date in August 2018 – higher than our projected 3.95 times. Additionally, the Company is anticipated to enjoy substantial long-term operational cost savings through synergies with SEB's other hydro power plants. Sarawak Hidro is also bound by other strict covenants, which tighten the transaction structure and provide further certainty throughout the tenure of the Sukuk. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Sarawak Hidro is an independent power producer that owns and operates the 2,400MW Bakun hydroelectric plant, under the PPA that runs up to 31 March 2043. The first unit of the Plant was commissioned in August 2011, with full commercial operation achieved in July 2014. The Bakun dam, which the Company owns, is Malaysia's largest hydro-powered electricity producer and key to the development of the Sarawak Corridor of Renewable Energy. As with other IPPs, Sarawak Hidro is exposed to regulatory and single-project risks.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Ong Ju Laine<br> (603) 7628 1183<br> <a href="mailto:julaine@ram.com.my">julaine@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-MY"><o:p> </o:p></span></p> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-75281900895193883472018-12-03T10:40:00.001+08:002018-12-03T10:40:59.261+08:00FW: RAM Ratings reaffirms AA2/Stable rating of Kesas’ sukuk<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 30 Nov 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has reaffirmed the AA2/Stable ratings of Kesas Sdn Bhd's (the Company) RM735 million <i>Sukuk Musharakah</i> IMTN (2014/2023). The reaffirmation of the rating is based on our expectation that the Company will maintain its strong debt-servicing aptitude, underpinned by the mature traffic profile of the Shah Alam Expressway (the SAE or the Expressway). <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The Expressway's traffic volume has been declining, with its average daily traffic (ADT) contracting to 326,872 vehicles in FY Jul 2018 (FY Jul 2017: 341,148 vehicles), albeit within RAM's expectation. This is largely attributable to the reduction in traffic volume at the Awan Besar/Kecil toll plaza, following the commencement of operations for the Light Rail Transit (LRT) extension, the road enhancement at the Jalan Puchong-Sungai Besi interchange and the abolishment of toll collections along Federal Highway Route 2 (FHR2). On the other hand, the cancellation of the KL-Klang Bus Rapid Transit (BRT) busway and the delay in completion date of the LRT 3 project to 2024 will relieve the downward pressure on the SAE's future traffic performance. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Taking into account the potential traffic diversion to competing infrastructure, we envisage a further decline in the Expressway's traffic volume if its toll rate increases over the next few years (+25% to RM2.50 due in 2016 is assumed to be delayed to 2020 and +20% to RM3.00 in 2021). Despite a lower projected ADT in our stressed sensitivity tests, however, the Company's debt-servicing capability remains intact. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">While the abolishment of toll collections remains uncertain in the medium term, we believe that the GoM will balance its expropriation plans against any potential implication on the debt capital market. On this note, Kesas has been promptly receiving compensation payments from the GoM for its inability to raise toll rates as per its CA. We believe the GoM will continue to honour the compensation arrangement in the event of non-revision. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">As with most concession-related projects, Kesas is inherently exposed to single-project risk, although the entire stretch of the SAE is unlikely to be disrupted at any particular time.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Nurhayati Sulaiman<br> (603) 7628 1040<br> <a href="mailto:yati@ram.com.my">yati@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><a name="_Hlk530668833"></a><o:p></o:p></span></p> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-37901084494117207332018-11-28T16:01:00.001+08:002018-11-28T16:01:20.270+08:00FW: RAM Ratings reaffirms AAA(s) ratings of sukuk issues by Khazanah’s funding conduits<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><o:p> </o:p></b></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 28 Nov 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has reaffirmed the AAA(s)/stable ratings of Rantau Abang Capital Berhad's RM7.0 billion Islamic MTN Programme, Danga Capital Berhad's RM20.0 billion Multi-Currency Islamic Securities Programme and Ihsan Sukuk Berhad's RM1.0 billion Sukuk Ihsan Programme. Rantau Abang Capital, Danga Capital and Ihsan Sukuk (collectively, the Issuers) are the funding conduits of Khazanah Nasional Berhad (the Company) and had been incorporated for the sole purpose of facilitating the issuance of the Islamic securities.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The suffix (s) reflects the enhancement of the respective Issuers' Islamic securities beyond their own credit strength, based on Khazanah's contractual obligations vis-à-vis its undertaking to top up any shortfall in meeting expected income distributions and capital returns under the Islamic securities, upon their maturity or the occurrence of a dissolution event. In the case of Ihsan Sukuk, Khazanah's purchase undertaking to meet either full or partial repayment (reduced by a pre-determined percentage) of the Sukuk Ihsan is subject to the performance of the underlying sustainable and responsible investment project against targeted indicators.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The enhanced ratings are ultimately indicative of Khazanah's creditworthiness, premised on its critical link with the Government of Malaysia (GoM) and its fairly diversified investment portfolio that comprises strong credit profile investee companies and provide sustainable dividend earnings. Subsequent to a change in government in May 2018 and an overhaul of the Company's board in July 2018, Khazanah had announced an intention to review and restructure its portfolio in line with its key mandate – to distinguish between what are deemed strategic domestic investments and investment decisions based on commercial objectives. Nevertheless, the Company is expected to continue to hold meaningful stakes in investee companies or undertake investments in sectors viewed as strategically important to the country. The GoM's influence over Khazanah's overall direction and management also remains clear, with the Prime Minister designated as chairman of the Board. The GoM's full ownership of Khazanah (save for one share held by the Federal Land Commissioner) further underscores the direct linkage between the two parties. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">After a lacklustre performance for two consecutive years, Khazanah's portfolio realisable asset value (RAV) climbed 8.2% (2016: -3.2% y-o-y) to RM157.2 billion in fiscal 2017, while its net worth adjusted rebounded by 13.2% (2016: -6.2%) to RM115.6 billion. The improvements mainly stemmed from Khazanah's key listed companies and investments in Chinese equities including Alibaba. A recovery in Khazanah's profit before tax to RM2.8 billion in fiscal 2017 (2016: RM4.2 million) reflected these improvements, as well as larger divestment gains, stable dividend earnings, a lower impairment loss on MAB, and some upside in forex gains. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">In the near term, Khazanah's K-7 portfolio RAV and earnings could be affected by current headwinds on the global and domestic front as well as changes in the new government's policies and measures. In 1H 2018, the KLCI was down 5.7%. Over the same period, Khazanah's dividend earnings fell 13.6% y-o-y (unaudited) on an annualised basis. In line with the GoM's objective to reduce its participation in the private sector, the Company may divest some of its stakes in its key listed entities (known as the K-7), particularly those deemed non-strategic. While this could result in reduced earnings visibility and stability, we expect the process to be gradual, and measured against Khazanah's commercial investments in minimising any earnings gap. The Company's continuous emphasis on diversifying its portfolio (44.5% of RAV was derived from abroad as at end-2017), with plans to increase foreign investments and those in 'new economy' sectors that provide a more sustainable stream of revenue and mitigate disruptions, could help strengthen portfolio resilience over the longer term. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Largely owing to financial support extended to weaker subsidiaries and for the purpose of funding its investment activities, Khazanah's debt level (including wholly owned SPVs and subsidiaries of the Company) remained high. Notwithstanding Khazanah's intention to exit loss-making non-strategic investee companies over the longer term, financial assistance may still be required as long as they remain in its stable. In addition, we do not discount the likelihood of further financial assistance to the government through higher dividend payouts. In fiscal 2017, Khazanah paid RM1 billion of dividends to the government and redeemed RM1.20 billion in redeemable cumulative convertible preference shares issued to the latter. That said, we expect the Company to continue to enjoy easy access to debt capital markets in raising funds. Viewed as a government-related issuer, Khazanah is able to leverage or pledge its assets, consistently keeping the ratio of its portfolio RAV to liabilities at around 3 times (fiscal 2017: 3.1 times). <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Tan Han Nee<br> (603) 7628 1023<br> <a href="mailto:hannee@ram.com.my">hannee@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Pathma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p> <p class="MsoNormal"><a name="_Hlk530668833"></a><o:p> </o:p></p> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-44058072256175998262018-11-28T11:16:00.003+08:002018-11-28T11:16:31.541+08:00FW: AAM News: AXA to buy out China joint venture partners for 4.6 billion RMB <div class="WordSection1"> <p class="MsoNormal"><b><o:p> </o:p></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"> <o:p></o:p></p> <div align="center"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="716" style="width:537.0pt"> <tbody> <tr> <td width="716" 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class="MsoNormal"><span style="color:white"> </span><span style="color:white"><o:p></o:p></span></p> </td> </tr> </tbody> </table> </td> </tr> <tr> <td width="710" style="width:532.5pt;padding:0in 0in 0in 0in"> <p class="MsoNormal"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=https://www.asiaassetmanagementevents.com/event/p/14174" target="_blank"><span style="text-decoration:none"><img border="0" width="710" height="128" style="width:7.3958in;height:1.3333in" id="_x0000_i1026" src="http://u2.ufosend.com/files/uploads/a/asiaasset/images/Hong-Kong-RT.jpg" alt=" The 3rd Pensions and ESG Forum in Hong Kong"></span></a><o:p></o:p></p> </td> </tr> <tr style="height:24.0pt"> <td width="716" style="width:537.0pt;padding:0in 0in 0in 0in;height:24.0pt"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="710" style="width:532.5pt"> <tbody> <tr style="height:24.0pt"> <td width="440" style="width:330.0pt;background:#03419A;padding:0in 0in 0in 12.0pt;height:24.0pt"> <p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:white;letter-spacing:.1pt"><span style="color:white">Latest News</span></span></b><b><span style="font-size:9.0pt;font-family:"Times New Roman",serif;color:white;letter-spacing:.1pt"><span style="color:white"><o:p></o:p></span></span></b></p> </td> <td width="200" style="width:150.0pt;background:#03419A;padding:0in 12.0pt 0in 0in;height:24.0pt"> <p class="MsoNormal" align="right" style="text-align:right"><i><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:white;letter-spacing:.1pt"><span style="color:white">28 November 2018</span></span></i><i><span style="font-size:9.0pt;font-family:"Times New Roman",serif;color:white;letter-spacing:.1pt"><span style="color:white"><o:p></o:p></span></span></i></p> </td> </tr> </tbody> </table> </td> </tr> <tr> <td width="716" style="width:537.0pt;padding:0in 0in 0in 0in"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="710" style="width:532.5pt"> <tbody> <tr> <td width="496" valign="top" style="width:372.0pt;padding:0in 0in 0in 0in"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="470" style="width:352.5pt"> <tbody> <tr> <td width="470" style="width:352.5pt;padding:0in 0in 0in 0in"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="470" style="width:352.5pt"> <tbody> <tr style="height:112.5pt"> <td width="150" style="width:112.5pt;background:#EEF1F5;padding:0in 0in 0in 0in;height:112.5pt"> <p class="MsoNormal"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/AXA_China_1127.aspx" target="_blank"><span style="text-decoration:none"><img border="0" width="150" height="150" style="width:1.5625in;height:1.5625in" id="_x0000_i1027" src="http://u2.ufosend.com/files/uploads/a/asiaasset/images/China_Flag2.jpg" alt="AXA to buy out China joint venture partners for 4.6 billion RMB"></span></a><o:p></o:p></p> </td> <td width="290" style="width:217.5pt;background:#666666;padding:0in 11.25pt 0in 11.25pt;height:112.5pt"> <p class="MsoNormal"><b><span style="font-size:15.0pt;color:white"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/AXA_China_1127.aspx" target="_blank"><span style="font-family:"Times New Roman",serif;color:white;text-decoration:none">AXA to buy out China joint venture partners for 4.6 billion RMB </span></a></span></b><br> <br> <i><span style="font-size:9.0pt;font-family:"Times New Roman",serif;color:#CCCCCC">Insurance: AXA will become the first foreign insurer to fully own a major property and casualty insurer in China</span></i><o:p></o:p></p> </td> </tr> </tbody> </table> <p class="MsoNormal"><span style="display:none"><o:p> </o:p></span></p> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="470" style="width:352.5pt"> <tbody> <tr> <td width="440" style="width:330.0pt;background:#EEF1F5;padding:7.5pt 7.5pt 7.5pt 15.0pt"> <h4 style="line-height:11.25pt"><span style="font-size:10.5pt;font-family:"Times New Roman",serif;color:navy"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/20181102_securitised-debt_schroders.aspx" target="_blank">Securitised debt </a></span><span style="color:#838383"><o:p></o:p></span></h4> <p class="MsoNormal" style="line-height:11.25pt"><span style="font-size:10.0pt;font-family:"Times New Roman",serif;color:#838383">Debt Markets: The US$13 trillion-plus securitisation market is one of the largest categories in the US fixed income space</span><span style="font-size:9.0pt;color:#838383"><br> <img border="0" width="9" height="9" style="width:.0937in;height:.0937in" id="_x0000_i1028" src="http://u2.ufosend.com/app/webroot/files/uploads/a/asiaasset/images/arrow.png"><span class="readmore1"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/20181102_securitised-debt_schroders.aspx" target="_blank"><b><span style="font-size:8.5pt;color:#F0B68A;text-decoration:none">Read More</span></b></a></span> <o:p></o:p></span></p> <h4 style="line-height:11.25pt"><span style="font-size:10.5pt;font-family:"Times New Roman",serif;color:navy"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=http://www.asiaasset.com/news/AffinSamsung_gte_1127.aspx" target="_blank">Malaysia's Affin Hwang AM inks pact with Samsung AM to develop products for local market </a> </span><span style="color:#838383"><o:p></o:p></span></h4> <p class="MsoNormal" style="line-height:11.25pt"><span style="font-size:10.0pt;font-family:"Times New Roman",serif;color:#838383">Market Access: Affin Hwang AM expects to launch its first leveraged and inverse ETF in the first half of 2019</span><span style="font-size:9.0pt;color:#838383"><br> <img border="0" width="9" height="9" style="width:.0937in;height:.0937in" id="_x0000_i1029" src="http://u2.ufosend.com/app/webroot/files/uploads/a/asiaasset/images/arrow.png"><span class="readmore1"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=http://www.asiaasset.com/news/AffinSamsung_gte_1127.aspx" target="_blank"><b><span style="font-size:8.5pt;color:#F0B68A;text-decoration:none">Read More</span></b></a></span> <o:p></o:p></span></p> <h4 style="line-height:11.25pt"><span style="font-size:10.5pt;font-family:"Times New Roman",serif;color:navy"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=https://www.asiaasset.com/news/SK_NPS_1126.aspx" target="_blank">South Korea's NPS picks four managers for alternatives mandates, report says </a></span><span style="color:#838383"><o:p></o:p></span></h4> <p class="MsoNormal" style="line-height:11.25pt"><span style="font-size:10.0pt;font-family:"Times New 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width="470" style="width:352.5pt"> <tbody> <tr style="height:24.0pt"> <td width="440" style="width:330.0pt;background:#03419A;padding:0in 0in 0in 12.0pt;height:24.0pt"> <p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:white;letter-spacing:.1pt"><span style="color:white">Monthly Top Ten</span></span></b><b><span style="font-size:9.0pt;font-family:"Times New Roman",serif;color:white;letter-spacing:.1pt"><span style="color:white"><o:p></o:p></span></span></b></p> </td> </tr> </tbody> </table> </td> </tr> <tr> <td width="470" style="width:352.5pt;padding:0in 0in 0in 0in"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="470" style="width:352.5pt"> <tbody> <tr> <td width="470" style="width:352.5pt;padding:0in 0in 0in 0in"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="470" style="width:352.5pt"> <tbody> <tr> <td width="440" style="width:330.0pt;background:#E0E0E0;padding:7.5pt 7.5pt 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ALL RIGHTS RESERVED.</span><span style="font-size:8.0pt;color:#888888"><br> </span><span style="font-size:8.0pt;font-family:"Arial",sans-serif;color:#888888">1701 Singga Commercial Centre, 148 Connaught Road West, Hong Kong Tel: (852) 2547-7331 E-mail: </span><span style="font-size:8.0pt;color:#888888"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=744&batch_id=1505&rs=1&s_lang=&post_datetime=20181128070012&email=meor@bpam.com.my&to_url=mailto:enquiries@asiaasset.com" target="blank">enquiries@asiaasset.com</a></span><o:p></o:p></p> </td> <td width="4" style="width:3.0pt;padding:.75pt .75pt .75pt .75pt;height:39.0pt"> <p class="MsoNormal"><br> <o:p></o:p></p> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> </div> </td> </tr> </tbody> </table> </div> <p class="MsoNormal"><span style="display:none"><o:p> </o:p></span></p> <table class="MsoNormalTable" border="0" cellpadding="0" width="100%" style="width:100.0%"> <tbody> <tr> <td style="padding:.75pt .75pt .75pt .75pt"> <p class="MsoNormal" align="center" style="text-align:center"><img border="0" id="edm_read" src="http://u2.ufosend.com/emarketing/res/edm_read.php?cn=asiaasset&campaign_id=744&batch_id=1505&post_datetime=20181128070012&rs=1&s_lang=&recipient=meor@bpam.com.my"><o:p></o:p></p> </td> </tr> </tbody> </table> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-54775120512956923802018-11-28T11:16:00.001+08:002018-11-28T11:16:15.429+08:00FW: MARC AFFIRMS FI RATING OF AAA ON BANK PEMBANGUNAN <div class="WordSection1"> <p class="MsoNormal"><b><span style="font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"><span style="font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <h1 style="margin-right:0in"><span lang="EN-GB" style="font-size:22.0pt;color:black">P R E S S A N N O U N C E M E N T<o:p></o:p></span></h1> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black"> <o:p></o:p></span></p> <p class="MsoBodyText3" align="right" style="text-align:right"><a name="OLE_LINK1"><span lang="EN-GB" style="font-size:11.0pt;color:black">FOR IMMEDIATE RELEASE<o:p></o:p></span></a></p> <p class="MsoBodyText3"><span style="mso-bookmark:OLE_LINK1"><span lang="EN-GB" style="font-size:11.0pt;color:black"><o:p> </o:p></span></span></p> <p class="MsoBodyText3"><span style="mso-bookmark:OLE_LINK1"><span lang="EN-GB" style="font-size:11.0pt;color:black">MARC AFFIRMS FI RATING OF AAA ON BANK PEMBANGUNAN <o:p></o:p></span></span></p> <p class="MsoBodyText3" style="line-height:120%"><span style="mso-bookmark:OLE_LINK1"><span lang="EN-GB" style="font-size:10.0pt;line-height:120%"><o:p> </o:p></span></span></p> <span style="mso-bookmark:OLE_LINK1"></span> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">MARC has affirmed its <b>AAA </b>financial institution (FI) rating on Bank Pembangunan Malaysia Berhad (Bank Pembangunan). The rating carries a <b>stable</b> outlook. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">The FI rating is solely premised on Bank Pembangunan’s status as a wholly government-owned development financial institution (DFI) which was incorporated to extend loans and financial support to specific industries promoted by the government. Government support to the DFI has been evident through government guarantees extended on borrowings as well as compensation provided for loss of interest income and credit loss. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">Gross impaired loans (GIL) ratio stood at 12.1% as at end-2017 (2016: 15.0%). The lower GIL ratio was attributable to higher write-offs which lowered gross impairments in the technology, oil and gas, and maritime sectors. These three sectors had faced the brunt of the bank’s problematic loans, with about 64% or RM1.6 billion of their total exposure of RM2.6 billion having been classified as impaired in 2017. The bank recorded slightly higher impairments in the infrastructure loan portfolio, which had a GIL ratio of 5.2% as at end-2017 (2016: 4.8%). <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">Infrastructure loans have remained key to Bank Pembangunan’s growth, accounting for 74% of total loans approved of RM3.3 billion during 2017. Concentration risk is mitigated as the majority of existing infrastructure loans are related to government-initiated projects which benefit from direct or indirect government support. MARC notes that the group’s gross loans have continued contracting in recent years as loan growth has been offset by large repayments. Given the challenging economic conditions, MARC expects loan growth over the near term to remain muted.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">Bank Pembangunan’s capital position as reflected by its Basel I core and risk-weighted capital ratios of 29.1% and 33.4% remained strong. The strong capital position offers a buffer against asset quality weakness. In 2017, the DFI’s profit before tax rose 56.7% y-o-y to RM325.3 million, mainly attributable to lower impairments in the year. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">Bank Pembangunan’s funding profile remained largely supported by the government as reflected by government-guaranteed borrowings and deposits from the government and its related entities accounting for 34.4% and 39.9% of total funding.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">Contacts: Douglas De Alwis, +603-2717 2965/<span style="color:black"> </span></span><span lang="EN-GB"><a href="mailto:douglas@marc.com.my"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">douglas@marc.com.my</span></a></span><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">; </span><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Sharidan Salleh, +6</span><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">03-2717 2954/ </span><span lang="EN-GB"><a href="mailto:sharidan@marc.com.my"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">sharidan@marc.com.my</span></a></span><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">. <span style="color:black"><o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">November 28, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">[This announcement is available in MARC’s corporate website at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">---- DISCLAIMER ----<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <b><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif">© 2018 Malaysian Rating Corporation Berhad<o:p></o:p></span></b></p> <p class="MsoNormal"><span style="font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad (“MARC”) accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-50988664816178649152018-11-27T15:54:00.001+08:002018-11-27T15:54:22.655+08:00FW: MARC AFFIRMS SINAR KAMIRI’S RATING AT AA-IS WITH A STABLE OUTLOOK <div class="WordSection1"> <p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <h1><span lang="EN-GB" style="font-size:22.0pt;font-family:"Arial",sans-serif">P R E S S A N N O U N C E M E N T<o:p></o:p></span></h1> <p class="MsoNoSpacing"><span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoHeading7" align="right" style="text-align:right"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">MARC AFFIRMS SINAR KAMIRI'S RATING AT AA-<i><sub>IS</sub></i> WITH A STABLE OUTLOOK <o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">MARC has affirmed its <b>AA-<i><sub>IS</sub></i></b> rating on Sinar Kamiri Sdn Bhd's Green SRI Sukuk Wakalah of up to RM245.0 million. The outlook on the rating is <b>stable</b>.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">Sinar Kamiri is undertaking the development of a greenfield solar power generation facility with a capacity of 49.0MWac in Sungai Siput, Perak. The rating primarily reflects Sinar Kamiri's healthy project fundamentals that are underpinned by a 21-year solar power purchase agreement with Tenaga Nasional Berhad (TNB) under which energy generated by Sinar Kamiri's solar power plant up to a certain quantity will be purchased by TNB at a fixed tariff. <o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The project is expected to achieve commercial operations date (COD) by November 30, 2018, a three-month delay from the initial scheduled COD (SCOD) on August 31, 2018. The delay has been partly attributed to issues relating to plant construction and end-testing of TNB interconnection facilities. As at end-October 2018, the plant's overall construction progress stood at 96.2% with the outstanding works mainly related to testing and commissioning before achieving COD. MARC notes that the plant has already achieved initial operation on November 2, 2018, and therefore any further delay to TNB's walkaway event date of February 27, 2019 is highly unlikely.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">Capex during construction has remained within budget with a slight increase in development expenses at the plant. Additional expenses incurred were met by funds from the contingency buffer, higher interest income as well as savings from the zerorisation of GST effective June 1, 2018. While Sinar Kamiri is liable to pay liquidated damages (LD) to TNB given the failure to achieve SCOD, the payments of RM49,000 for each day of delay from the SCOD are expected to be recovered from engineering, procurement and construction contractor Entrutech Sdn Bhd. MARC understands that TNB has not given any indication on the LDs payable although the company is contractually bound to pay.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The rating is moderated by the variability of solar resource which determines the amount of electricity generated. Sinar Kamiri has utilised internationally used data for its cash flow forecast. The data is consistent with solar farms in an equatorial environment. The operations and maintenance (O&M) works will be undertaken by Mudajaya Facilities Management Sdn Bhd, which is expected to draw expertise from Mudajaya group's experience in managing a 10MW solar power plant in Gebeng, Pahang. The O&M job scope of a solar power plant is relatively less complicated compared to a conventional power plant, which mitigates operational risks.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">Sinar Kamiri is also covered by equipment warranties that are in line with acceptable industry standards. A maintenance reserve amounting to RM10.0 million will be built up over 10 years starting from a year after the COD is achieved to cover contingencies for major maintenance works including the replacement of solar panels and inverters. Any withdrawals from the reserves will be replenished over a period of three years from the date of withdrawals.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">Under MARC's sensitised cases, the company would be able to comply with the minimum financial service cover ratio with cash of 1.25x throughout the sukuk tenure. The sensitivity includes non-receipt of GST input tax refunds of RM10.6 million, plant unavailability of 2.4%, and LDs payable to TNB (without LD receivables from EPC). Notably, Sinar Kamiri would need to rely on brought-forward cash given that the FSCR (without cash balances) falls below 1.00x in some years.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The stable outlook incorporates the expectation that the project will achieve COD before the walkaway event date and generate stable income streams that are supportive of project economics.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">Contacts: Wan Abdul Muiz Wan Abdul Ghafar, +603-2717 2939/ <a href="mailto:muiz@marc.com.my"><span style="text-decoration:none">muiz@marc.com.my</span></a><span class="MsoHyperlink"><span style="text-decoration:none">; Hari Vijay, +603-2717 2937/ <a href="mailto:harivijay@marc.com.my">harivijay@marc.com.my</a>.</span></span><o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">November 27, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">[This announcement is available in MARC's corporate website at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">--- DISCLAIMER ---<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <b><span lang="EN-GB" style="font-size:11.0pt">© 2018 Malaysian Rating Corporation Berhad</span></b><span lang="EN-GB"><o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-15185026794183995792018-11-26T10:09:00.000+08:002018-11-26T10:10:07.961+08:00FW: AAM News: Allianz Real Estate invests in logistics sector in China and India <div class="WordSection1"> <p class="MsoNormal"><b><o:p> </o:p></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"> <o:p></o:p></p> <div align="center"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="716" style="width:537.0pt"> <tbody> <tr> <td 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style="width:15.0pt;padding:0in 0in 0in 0in;height:30.0pt"> <p class="MsoNormal"><span style="color:white"> </span><span style="color:white"><o:p></o:p></span></p> </td> </tr> </tbody> </table> </td> </tr> <tr> <td width="710" style="width:532.5pt;padding:0in 0in 0in 0in"> <p class="MsoNormal"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=743&batch_id=1499&rs=1&s_lang=&post_datetime=20181126070014&email=meor@bpam.com.my&to_url=https://www.asiaassetmanagementevents.com/event/p/14174" target="_blank"><span style="text-decoration:none"><img border="0" width="710" height="128" style="width:7.3958in;height:1.3333in" id="_x0000_i1026" src="http://u2.ufosend.com/files/uploads/a/asiaasset/images/Hong-Kong-RT.jpg" alt=" The 3rd Pensions and ESG Forum in Hong Kong"></span></a><o:p></o:p></p> </td> </tr> <tr style="height:24.0pt"> <td width="716" style="width:537.0pt;padding:0in 0in 0in 0in;height:24.0pt"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="710" style="width:532.5pt"> <tbody> <tr style="height:24.0pt"> <td width="440" style="width:330.0pt;background:#03419A;padding:0in 0in 0in 12.0pt;height:24.0pt"> <p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:white;letter-spacing:.1pt"><span style="color:white">Latest <span style="color:white">News</span></span></span></b><b><span style="font-size:9.0pt;font-family:"Times New Roman",serif;color:white;letter-spacing:.1pt"><span style="color:white"><o:p></o:p></span></span></b></p> </td> <td width="200" style="width:150.0pt;background:#03419A;padding:0in 12.0pt 0in 0in;height:24.0pt"> <p class="MsoNormal" align="right" style="text-align:right"><i><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:white;letter-spacing:.1pt"><span style="color:white">26 November 2018</span></span></i><i><span style="font-size:9.0pt;font-family:"Times New 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ALL RIGHTS RESERVED.</span><span style="font-size:8.0pt;color:#888888"><br> </span><span style="font-size:8.0pt;font-family:"Arial",sans-serif;color:#888888">1701 Singga Commercial Centre, 148 Connaught Road West, Hong Kong Tel: (852) 2547-7331 E-mail: </span><span style="font-size:8.0pt;color:#888888"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=743&batch_id=1499&rs=1&s_lang=&post_datetime=20181126070014&email=meor@bpam.com.my&to_url=mailto:enquiries@asiaasset.com" target="blank">enquiries@asiaasset.com</a></span><o:p></o:p></p> </td> <td width="4" style="width:3.0pt;padding:.75pt .75pt .75pt .75pt;height:39.0pt"> <p class="MsoNormal"><br> <o:p></o:p></p> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> </div> </td> </tr> </tbody> </table> </div> <p class="MsoNormal"><span style="display:none"><o:p> </o:p></span></p> <table class="MsoNormalTable" border="0" cellpadding="0" width="100%" style="width:100.0%"> <tbody> <tr> <td style="padding:.75pt .75pt .75pt .75pt"> <p class="MsoNormal" align="center" style="text-align:center"><img border="0" id="edm_read" src="http://u2.ufosend.com/emarketing/res/edm_read.php?cn=asiaasset&campaign_id=743&batch_id=1499&post_datetime=20181126070014&rs=1&s_lang=&recipient=meor@bpam.com.my"><o:p></o:p></p> </td> </tr> </tbody> </table> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-76674722399774529892018-11-23T15:50:00.003+08:002018-11-23T15:50:31.766+08:00FW: MARC AFFIRMS WCT HOLDINGS’ RATINGS AT AA- BUT REVISES OUTLOOK TO NEGATIVE FROM STABLE<div class="WordSection1"> <p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <h1><span lang="EN-GB" style="font-size:22.0pt;font-family:"Arial",sans-serif;color:#333333">P R E S S A N N O U N C E M E N T<o:p></o:p></span></h1> <p class="MsoNoSpacing"><span lang="EN-GB" style="color:#333333"><o:p> </o:p></span></p> <p class="MsoHeading7" align="right" style="text-align:right"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></b></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333">MARC AFFIRMS WCT HOLDINGS' RATINGS AT AA- BUT REVISES OUTLOOK TO NEGATIVE FROM STABLE<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">MARC has affirmed its ratings on WCT Holdings Berhad's RM1.0 billion Medium-Term Notes (MTN) Programme and RM1.5 billion Sukuk Murabahah Programme at <b>AA- </b>and <b>AA-<i><sub>IS</sub></i></b>. The ratings outlook has been revised to <b>negative</b> from stable. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">The outlook revision considered the slower-than-expected progress to reduce WCT Holdings' elevated leverage position which is unlikely to be addressed meaningfully over the near term. The group has faced a prolonged delay to monetise its assets by divesting its investment properties to a real estate investment trust (REIT), an integral component of its deleveraging plan. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">The ratings affirmation is underpinned by sizeable government-related infrastructure contracts and building construction projects that provide earnings visibility over the medium term. WCT Holdings' longstanding position as a key domestic construction player places the group in good stead to vie for future contracts. The group's investment properties, which include five shopping malls, generate a steady but moderate income stream that reduces earnings volatility. Notwithstanding these factors, WCT Holdings' cash flow generation has been impacted by slower collection from construction projects and property sales, leading to a continued reliance on borrowings to fund working requirements.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">As at end-June 2018, total borrowings rose to RM3.6 billion, translating into a gross debt-to-equity (DE) ratio of 1.15x (2017: RM3.3 billion; 1.04x). The group is expected to increase collection from contracts, property and land sales, proceeds from which will be utilised to reduce borrowings. MARC estimates these proceeds to be about RM430 million and will provide a proforma net DE ratio of about 0.88x by end-2018. The group needs to further improve its cash flow generation and strengthen its debt metrics to below 0.70x by mid-2019, failing which downward rating pressure will increase.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">For 1H2018, cash flow from operations (CFO) was still negative RM15.0 million, albeit a slight improvement from negative RM22.2 million as at end-2017. Over the medium term, the group's earnings visibility will mainly be from its sizeable construction contracts that include infrastructure contracts for the Light Rail Transit 3 (LRT3) and Mass Rapid Transit 2 (MRT2) projects (which are worth a combined total of RM2.3 billion) and several infrastructure and building projects. Total construction order book stood at RM7.2 billion including recent contracts worth RM1.77 billion from a related entity for the Pavilion Damansara Heights commercial development. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">WCT Holdings' property division continues to be affected by weak sentiment with property sales declining sharply y-o-y to RM73.0 million and contracted sales declining to RM161.0 million in 1H2018 (1H2017: RM131.7 million; RM322.0 million). In light of the slower take-up rates for ongoing and completed projects, the group's working capital requirement has come under pressure from the build-up in inventory which has grown to RM726.0 million as at end-August 2018. MARC understands that the group is undertaking measures to clear its inventory through downward repricing and promotional activities to reduce holding costs. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">MARC expects WCT Holdings to expedite plans to reit its commercial properties following a legal resolution in its favour on the Bandar Bukit Tinggi (BBT) Mall in Klang, Selangor. The REIT exercise will involve Paradigm Mall in Petaling Jaya, BBT Mall and two hotels. The group also plans to partially divest its Paradigm Mall in Johor Bahru; proceeds from the exercise will support its deleveraging exercise. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><br> In 1H2018, the group recorded a 41.4% and 88.4% y-o-y increase in revenue and operating profit to RM1.2 billion and RM178.9 million. Of the total revenue, about 77.0% was contributed by the construction segment. Free cash flow was in deficit of RM77.6 million but substantially lower than the negative RM319.6 million as at end-2017. The improvement was partly due to receipts of the first milestone payment of RM253.0 million from TRX City Sdn Bhd in May 2018. As at end-1H2018, WCT Holdings exhibited a moderate liquidity position and financial flexibility with cash and bank balances of RM558.1 million. Its outstanding under the rated facilities stood at RM2.26 billion as at end-June 2018.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle" style="margin-bottom:5.0pt;mso-add-space:auto;text-align:justify"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">Contacts: Wan Abdul Muiz Wan Abdul Ghafar, +603-2717 2939/ </span><span lang="EN-GB"><a href="mailto:muiz@marc.com.my"><span style="font-family:"Arial",sans-serif;color:#333333">muiz@marc.com.my</span></a></span><span class="MsoHyperlink"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">;</span></span><span class="MsoHyperlink"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333;text-decoration:none"> Taufiq Kamal, +603-2717 2951/ </span></span><span class="MsoHyperlink"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><a href="mailto:taufiq@marc.com.my">taufiq@marc.com.my</a></span></span><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">November 23, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">[This announcement is available in MARC's corporate website at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">--- DISCLAIMER ---<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <b><span lang="EN-GB" style="font-size:11.0pt">© 2018 Malaysian Rating Corporation Berhad</span></b><span lang="EN-GB"><o:p></o:p></span></p> <p class="MsoPlainText" style="text-align:justify"><o:p> </o:p></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-7997650017791631882018-11-23T15:50:00.001+08:002018-11-23T15:50:20.684+08:00FW: MARC AFFIRMS DRB-HICOM’S RATINGS WITH STABLE OUTLOOK<div class="WordSection1"> <p class="MsoNormal"><b><span style="font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"><span style="font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <h1 style="margin-right:0in"><span lang="EN-GB" style="font-size:22.0pt">P R E S S A N N O U N C E M E N T<o:p></o:p></span></h1> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Arial",sans-serif"> </span><span lang="EN-GB" style="font-family:"Arial",sans-serif"> <o:p></o:p></span></p> <p class="MsoNormal" align="right" style="text-align:right;text-indent:3.0in"><b><span lang="EN-GB" style="font-family:"Arial",sans-serif">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></p> <p class="MsoBodyText3"><span lang="EN-GB" style="font-size:11.0pt"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><b><span lang="EN-MY" style="font-family:"Arial",sans-serif;color:black">MARC AFFIRMS DRB-HICOM'S RATINGS WITH STABLE OUTLOOK<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><a name="_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">MARC has affirmed its ratings of <b>A+<i><sub>IS </sub></i></b>and <b>A-<i><sub>IS</sub></i></b> on DRB-HICOM Berhad's (DRB-HICOM) Islamic Medium-Term Notes (IMTN) Programme of up to RM1.8 billion and Perpetual Sukuk Musharakah Programme (Perpetual Sukuk) of up to RM2.0 billion. The two-notch rating differential between the Perpetual Sukuk and the IMTN is in line with MARC's notching principles on hybrid securities.<o:p></o:p></span></a></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">The ratings outlook is maintained at <b>stable</b>. MARC has observed an improving trend in DRB-HICOM group's consolidated credit profile through concentrated efforts in reducing leverage and improving liquidity that has seen total borrowings declining to RM5.79 billion as at end-June 2018 (1QFY2019) from RM6.8 billion at end-FY2016. This has resulted in the net adjusted debt-to-equity ratio (DE) falling to 0.46x from 0.68x during the period. Additionally, part of the proceeds from the impending disposal of concessionaire Alam Flora Sdn Bhd for RM944.6 million will be utilised to further pare down its borrowings. The improvement is on the back of groupwide restructuring efforts through asset disposals of non-strategic subsidiaries to increasingly position itself as a major automotive and logistics player.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">Notwithstanding the improvement, the ratings/outlook are being maintained at the current level mainly due to the still ongoing challenges in the group's automotive segment. This segment, which contributed 53% to revenue for the first quarter ending June 30, 2018 (1QFY2019), has continued to register operating losses. Its 50.1%-owned subsidiary Proton Holdings Berhad (Proton) remains a drag on group performance, registering losses of RM134.6 million in FY2018 on a continued decline in sales volume and competitive pricing pressure. DRB-HICOM's associate automotive companies, mainly Honda (M) Sdn Bhd, have partly offset the losses in the automotive segment. MARC views the group's operating profit would remain weighed down by the challenging outlook for the automotive sector attributed to a weaker economic growth forecast.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#333333">Proton car sales registered an 11.0% y-o-y decline to 64,459 units in FY2018 but sales are expected to be boosted by the launch of an SUV model for which it has received bookings of about 10,000 units to date. The production of the vehicle, along with two other planned models will require additional investments in Proton's production facilities over the near to medium term for which DRB-HICOM and its partner in Proton, Zhejiang Geely Holding Group, will make proportionate contributions. </span></span><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">The performance of the group's non-Proton marques such as Honda remained commendable, allowing DRB-HICOM to maintain its overall domestic market share of 36.3% of the total industry volume of 570,935<b> </b>units for FY2018.</span></span><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#333333"><o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">DRB-HICOM also benefits from long-term contracts comprising the outstanding RM2.1 billion armoured military vehicles contract with the government and RM9.3 billion aerospace component manufacturing contract with aircraft manufacturers. The group's recurrent earnings stream is also boosted by its two recent government concessions related to the new immigration and customs complex in Bukit Kayu Hitam and the new broadcast system at Angkasapuri. The group's aviation and courier businesses, consolidated under Pos Malaysia Berhad, have continued to grow. However, the postal company's earnings have been hampered by losses in the traditional postal services segment, registering pre-tax losses of RM6.0 million in 1HFY2019 (1HFY2018: pre-tax profit of RM67.7 million). Over the near term, the group aims to strengthen its integrated logistics infrastructure.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><a name="_Hlk500258739"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">For 1QFY2019, DRB-HICOM registered revenue of RM2.7 billion and pre-tax losses of RM94.4 million (FY2018: RM12.8 billion; pre-tax profit of RM415 million). The FY2018 profitability stemmed from the receipt of a research & development grant of RM1.1 billion; excluding the grant, DRB-HICOM would register pre-tax losses of RM685 million. Going forward, the turnaround of DRB-HICOM's group performance would hinge on a substantial improvement in Proton's sales volumes. <o:p></o:p></span></a></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span style="mso-bookmark:_Hlk500258739"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span style="mso-bookmark:_Hlk500258739"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">The group has a strong liquidity position with cash balance of RM2.75 billion as at end-1QFY2019. </span></span></span><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">Its liquidity position would also be supported by proceeds from the planned disposal of its 2,200 acres of land and investments in leisure property assets. In return for the disposal, the group would receive 1,200 acres of industrial land parcels in Johor and cash proceeds of RM288 million which would provide an additional source of financial flexibility.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk530668833"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626">The stable outlook reflects MARC's expectation that DRB-HICOM's credit metrics would remain commensurate with its current rating band. An upward outlook/rating revision would be considered if DRB-HICOM continues to demonstrate a sustainable improvement in its consolidated financial performance, particularly its profitability and cash flow metrics.<o:p></o:p></span></span></p> <span style="mso-bookmark:_Hlk530668833"></span> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#333333">Contacts: Taufiq Kamal, +603-2717 2951/ </span><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#262626"><a href="mailto:taufiq@marc.com.my">taufiq@marc.com.my</a></span><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#333333">; Rajan Paramesran, +603 2717 2933/ <a href="mailto:rajan@marc.com.my">rajan@marc.com.my</a> <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoBodyText3"><span lang="EN-GB" style="font-size:10.0pt;color:#333333;font-weight:normal">November 23, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;text-indent:.5in"><span lang="EN-GB" style="font-size:8.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;text-indent:.5in"><span lang="EN-GB" style="font-size:8.0pt;font-family:"Arial",sans-serif">[This announcement is available in MARC's corporate homepage at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">---- DISCLAIMER ----<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <b><span lang="EN-GB" style="font-family:"Arial",sans-serif">© 2018 Malaysian Rating Corporation Berhad</span></b><span lang="EN-GB"><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-2081652366598775512018-11-23T15:49:00.003+08:002018-11-23T15:49:59.440+08:00FW: MARC ASSIGNS FINAL RATING OF AAAIS(fg) TO MASTEEL’S RM130.0 MILLION GUARANTEED SUKUK IJARAH PROGRAMME<div class="WordSection1"> <p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <h1><a name="OLE_LINK2"><span lang="PT-BR" style="font-size:22.0pt;font-family:"Arial",sans-serif;color:#333333">P R E S S A N N O U N C E M E N T<o:p></o:p></span></a></h1> <p class="MsoHeading7" align="right" style="margin:0in;margin-bottom:.0001pt;text-align:right"> <span style="mso-bookmark:OLE_LINK2"><b><span lang="PT-BR" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></b></span></p> <p class="MsoNormal" align="right" style="text-align:right;line-height:120%"><span style="mso-bookmark:OLE_LINK2"><b><span lang="EN-GB" style="font-size:11.0pt;line-height:120%;font-family:"Arial",sans-serif;color:#333333">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></span></p> <p class="MsoNormal" align="right" style="text-align:right"><span style="mso-bookmark:OLE_LINK2"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></span></p> <span style="mso-bookmark:OLE_LINK2"></span> <p class="MsoBodyText3"><span lang="EN-GB" style="font-size:11.0pt;color:black;text-transform:uppercase">MARC ASSIGnS FINAL RATING OF </span><span style="font-size:11.0pt;color:black">AAA<i><sub>IS(fg) </sub></i></span><span lang="EN-GB" style="font-size:11.0pt;color:black;text-transform:uppercase">TO MASTEEL'S RM130.0 MILLION GUARANTEED SUKUK IJARAH PROGRAMME</span><span lang="EN-GB" style="font-size:11.0pt;color:black"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">MARC has assigned a final rating of </span><a name="_Hlk530736102"><b><span style="font-family:"Tahoma",sans-serif;color:#333333">AAA<i><sub>IS(fg) </sub></i></span></b></a><span style="mso-bookmark:_Hlk530736102"></span><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">to Malaysia Steel Works (KL) Bhd's (Masteel) RM130.0 million Sukuk Ijarah Programme. The outlook on the rating is <b>stable</b>. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">Upon review of the final documentation of the issuance, MARC is satisfied that the terms and conditions of the Sukuk have not changed in any material way from the draft documentation on which the earlier preliminary rating of </span><span style="font-family:"Tahoma",sans-serif;color:#333333">AAA<i><sub>IS(fg) </sub></i></span><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">/Stable was based.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">For full details of the assigned rating, please see Masteel's preliminary rating announcement on October 26. The complete analysis is provided in the Credit Analysis Report which is available on MARC's website at <a href="http://www.marconline.com.my"> www.marconline.com.my</a>.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">Contacts: Hari Vijay, +603-2717 2937/ </span><span lang="EN-GB"><a href="mailto:harivijay@marc.com.my"><span style="font-family:"Arial",sans-serif;color:#333333">harivijay@marc.com.my</span></a></span><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">; </span><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333;mso-fareast-language:EN-MY">Wan Abdul Muiz Wan Abdul Ghafar, +603-2717 2939/ <u><a href="mailto:muiz@marc.com.my">muiz@marc.com.my</a>.</u><o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif">November 23, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:8.0pt;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:8.0pt;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif"> [This announcement is available in MARC's corporate website at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">--- DISCLAIMER ---<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB" style="font-size:12.0pt"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center"><b><span lang="EN-GB">© 2018 Malaysian Rating Corporation Berhad</span></b><span lang="EN-GB"><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-14977896784631242612018-11-23T15:49:00.001+08:002018-11-23T15:49:42.371+08:00FW: AAM News: Cambridge Associates’ head of Asia Alvin Tay resigns <div class="WordSection1"> <p class="MsoNormal"><b><o:p> </o:p></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"> <o:p></o:p></p> <div align="center"> <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="716" style="width:537.0pt"> <tbody> <tr> <td width="716" 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ALL RIGHTS RESERVED.</span><span style="font-size:8.0pt;color:#888888"><br> </span><span style="font-size:8.0pt;font-family:"Arial",sans-serif;color:#888888">1701 Singga Commercial Centre, 148 Connaught Road West, Hong Kong Tel: (852) 2547-7331 E-mail: </span><span style="font-size:8.0pt;color:#888888"><a href="http://u2.ufosend.com/emarketing/res/edm_link.php?cn=asiaasset&customer_id=0&campaign_id=741&batch_id=1496&rs=1&s_lang=&post_datetime=20181123073010&email=meor@bpam.com.my&to_url=mailto:enquiries@asiaasset.com" target="blank">enquiries@asiaasset.com</a></span><o:p></o:p></p> </td> <td width="4" style="width:3.0pt;padding:.75pt .75pt .75pt .75pt;height:39.0pt"> <p class="MsoNormal"><br> <o:p></o:p></p> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> </div> </td> </tr> </tbody> </table> </div> <p class="MsoNormal"><span style="display:none"><o:p> </o:p></span></p> <table class="MsoNormalTable" border="0" cellpadding="0" width="100%" style="width:100.0%"> <tbody> <tr> <td style="padding:.75pt .75pt .75pt .75pt"> <p class="MsoNormal" align="center" style="text-align:center"><img border="0" id="edm_read" src="http://u2.ufosend.com/emarketing/res/edm_read.php?cn=asiaasset&campaign_id=741&batch_id=1496&post_datetime=20181123073010&rs=1&s_lang=&recipient=meor@bpam.com.my"><o:p></o:p></p> </td> </tr> </tbody> </table> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-65855731605479883242018-11-22T11:47:00.001+08:002018-11-22T11:47:30.527+08:00FW: RAM Ratings reaffirms Pendidikan Industri YS’s sukuk rating<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><o:p> </o:p></b></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 21 Nov 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has reaffirmed the enhanced AA1(s)/Stable rating of Pendidikan Industri YS Sdn Bhd's (PIYSB or the Company) RM150 million <i>Bai' Bithaman Ajil </i>Islamic Debt Securities (2008/2022) (BaIDS). The rating reflects our view that PIYSB's debt-servicing ability in respect of the BaIDS remains substantially enhanced by the demonstrated and expected support from the Selangor State Government (SSG or the State). In February 2011, the Selangor State Executive Council approved a RM205.5 million allocation for all repayments on the BaIDS between 2012 and 2022. The State has been settling all the principal and profit payments due on behalf of PIYSB since January 2012, including those falling due in January 2019, which have been credited into the finance service and redemption account (FSRA). <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The SSG's intention of supporting PIYSB is detailed in a strongly worded Letter of Support (LoS). Although not an outright guarantee, the document states that the SSG will ensure – either through equity, loans, grants and/or other means – that PIYSB fully and promptly meets its financial obligations under the BaIDS throughout the tenure of the facility. PIYSB provides educational services via Universiti Selangor (Unisel), and is wholly owned by the State via Menteri Besar Selangor (Pemerbadanan) (MBI). Given its role in supporting the State's private higher-education objectives and based on RAM's recent interaction with senior SSG officials, we believe that the State will continue extending financial assistance to PIYSB if needed. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Without the LoS, PIYSB's stand-alone credit profile is very weak. In fiscal 2017 and 1H fiscal 2018, Unisel remained in the red with its average student population below its break-even level of 12,700 students. The university's average student population stood at a respective 9,370 and 9,640 in 2017 and 1H 2018, despite efforts to increase its enrolment. As such, PIYSB has not been able to generate sufficient cashflow to meet its current operational requirements and financial payments. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">In view of its role in supporting the State's higher-education objectives and the keenly competitive environment, a significant upward revision in Unisel's fees is deemed unlikely despite its hefty costs. We expect PIYSB to remain mired in losses and continue relying on financial assistance from the SSG to meet its operational cashflow requirements and financial payments.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The dispute between PIYSB and its previous hostel operator, Jana Niaga Sdn Bhd (JNSB), was resolved in December 2017. PIYSB has agreed to pay JNSB a settlement amount of RM19.75 million, besides taking over JNSB's RM51.70 million of liabilities to Bank Pembangunan Malaysia Berhad, which will be borne by the State. In September 2017, the State approved an allocation to the Company for the repayment to BPMB, from 2017 to 2021. In the meantime, the Malaysia Anti-Corruption Commission's (MACC) investigations on the alleged misappropriation of payments by MBI to JNSB (in August 2017) have yet to be concluded. <br> <br> PIYSB is highly leveraged. As at end-June 2018, its gearing ratio had deteriorated to 1.32 times (end-December 2017: 0.80 times) amid its higher debt level following the settlement of its dispute with JNSB. As at the same date, PIYSB held RM35.15 million of cash and bank balances against RM25.00 million of short-term debts. The Company's liquidity position is expected to stay vulnerable as it relies on timely requests for financial assistance and fund disbursements from the SSG. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> <b>Analytical contact</b><br> Aw Wei Xuan <br> (603) 7628 1198<br> <a href="mailto:weixuan@ram.com.my">weixuan@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="color:#1F497D">_________________________________________________________________________________________________________________________________________________________________</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#1F497D"><o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-MY"><o:p> </o:p></span></p> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-68379634448833548872018-11-21T15:32:00.001+08:002018-11-21T15:32:22.829+08:00FW: MARC AFFIRMS SUNWAY’S RATINGS BUT REVISES OUTLOOK TO STABLE FROM POSITIVE<div class="WordSection1"> <p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <h1><span lang="EN-GB" style="font-size:22.0pt;font-family:"Arial",sans-serif">P R E S S A N N O U N C E M E N T<o:p></o:p></span></h1> <p class="MsoHeading7" align="right" style="text-align:right"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></p> <p class="MsoNormal"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><b><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black">MARC AFFIRMS </span></b><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black">SUNWAY'S RATINGS BUT </span></b><b><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black">REVISES OUTLOOK TO STABLE FROM POSITIVE<o:p></o:p></span></b></p> <p class="MsoPlainText" style="text-align:justify"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">MARC has affirmed its ratings of <b>MARC-1/AA-</b> and <b>MARC-1<i><sub>IS(cg)/</sub></i>AA-<i><sub>IS(cg)</sub></i></b> on Sunway Berhad's (Sunway) RM2.0 billion Commercial Papers/Medium-Term Notes (CP/MTN) programme and Sunway Treasury Sukuk Sdn Bhd's (STSSB) RM2.0 billion Sukuk programme. STSSB's Sukuk programme carries an Al-Kafalah guarantee from Sunway. The affirmation is premised on Sunway Group's expected total debt level of RM10 billion to RM11 billion in the next two years.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">The ratings outlook has been revised to <b>stable</b> from positive. The revision reflects the increasing headwinds the Sunway Group faces in the property and construction sectors given the continuing subdued performance of the domestic property market and downward revision in government-related infrastructure contracts. Sunway Group's increased borrowing levels have also added to the rating agency's concerns. Meanwhile, the affirmed ratings are underpinned by Sunway Group's well-established businesses in property development, property investment, construction, healthcare and leisure-related operations that provide diversified sources of revenue and earnings. Its strong market position in the property and construction sectors would enable the group to weather challenges in these sectors. The group also retains sizeable cash generating ability and a moderate financial structure. <o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">These factors notwithstanding, MARC expects the group to adhere to tighter financial discipline, particularly on using debt to strengthen its market position or undertake opportunistic transactions. Sunway Group has since established sizeable programmes under which the group can substantially increase its borrowings. In this regard, the rating agency understands that group borrowings are expected to increase to RM11 billion by end-2020 (1H2018: RM9.0 billion) to fund its working capital requirement and capex. Its gross and net debt-to-equity (DE) stood at about 1.04x and 0.44x at end-1H2018 with net DE expected to increase to 0.48x by end-2018. However, any further rise in borrowings without concomitant measures to address debt metrics weakness could lead to downward rating pressure. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">For 1H2018, the property development division's revenue and profit before tax (PBT) declined by 46.3% y-o-y and 32.0% y-o-y to RM221.0 million and RM70.2 million, reflecting the continued weak sentiment in the sector. However, for 2H2018, the property division is expected to improve its performance; as at August 2018, property sales of RM1.27 billion have already surpassed the full year sales for FY2017 by 9.7%. Its unsold inventory remained at a moderate level, consisting of high-end properties. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">Sunway Group's construction order book stood lower at RM5.8 billion as at end-August 2018 (October 2017: RM6.7 billion), though it is still sizeable. Despite the tough operating environment for contractors, operating profit margins for its construction division have remained relatively stable at around 10.0%. While PBT rose 3.5% y-o-y to RM89.7 million in 1H2018, the ongoing slowdown in the construction sector may weigh on the division's performance over the medium term. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">The group's other business segments are likely to continue to cushion the impact from the slowdown. Sunway Group aims to add five more hospitals to its portfolio by 2023. While MARC recognises that diversification provides stability to Sunway Group's cash flow, the timing of the group's potentially 70% debt-funded expansion into the healthcare segment could contribute to a weakening in Sunway's credit metrics. Due to gestation period, these expansion plans are expected to result in continued negative free cash flow for the group. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">Cash flow from operations (CFO) has remained healthy, generating an average of RM519.5 million between 2014 and 2017; for 1H2018, CFO stood at RM225.0 million. Nonetheless, given the increased level of borrowings, CFO interest cover has continued to decline to 1.7x and is expected to fall to about 1.5x by end-2020 if borrowing levels increase to RM11 billion. MARC also notes that a mismatch in funding in 2017 and 1H2018 poses some short-term liquidity risks to the group.<o:p></o:p></span></p> <p class="MsoPlainText" style="text-align:justify"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal"><span style="font-family:"Arial",sans-serif;color:black">The full Credit Analysis Report will be made available on MARC's website at </span><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><a href="https://www.marconline.com.my/car/index">https://www.marconline.com.my/car/index</a>.<o:p></o:p></span></p> <p class="MsoPlainText" style="text-align:justify"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#262626"><o:p> </o:p></span></p> <p class="MsoPlainText" style="text-align:justify"><span style="font-size:9.0pt;font-family:"Tahoma",sans-serif;color:#262626"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><strong><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">Contacts: </span></strong><span class="apple-style-span"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">Wan Abdul Muiz, +603-2717 2939/</span></span><span class="apple-converted-space"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"> </span></span><span lang="EN-GB"><a href="mailto:muiz@marc.com.my"><span style="font-family:"Arial",sans-serif">muiz@marc.com.my</span></a></span><span class="apple-style-span"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">; </span></span><strong><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black;font-weight:normal">Hari Vijay</span></strong><strong><span lang="EN-GB" style="font-family:"Arial",sans-serif;font-weight:normal">,</span></strong><span class="apple-style-span"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"> +603-2717 2937/</span></span><span class="apple-converted-space"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"> </span></span><a name="_Hlk530407253"></a><a href="mailto:harivijay@marc.com.my"><span style="mso-bookmark:_Hlk530407253"><span lang="EN-GB" style="font-family:"Arial",sans-serif">harivijay@marc.com.my</span></span><span style="mso-bookmark:_Hlk530407253"></span></a><span style="mso-bookmark:_Hlk530407253"></span><span class="apple-style-span"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black">,</span></span><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif">November 21, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">[This announcement is available in MARC's corporate website at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">---- DISCLAIMER ----<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <b><span lang="EN-GB" style="font-family:"Arial",sans-serif">© 2018 Malaysian Rating Corporation Berhad</span></b><span lang="EN-GB"><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-14497138135417601492018-11-14T16:55:00.001+08:002018-11-14T16:55:11.011+08:00FW: MARC AFFIRMS AA-IS RATING ON DUKE 3’S RM3.64 BILLION SUKUK<div class="WordSection1"> <p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <h1 align="center" style="text-align:center"><span lang="DE" style="font-size:22.0pt;color:#333333">P R E S S A N N O U N C E M E N T<o:p></o:p></span></h1> <p class="MsoNormal"><span lang="DE" style="font-size:12.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" align="right" style="text-align:right;line-height:120%"><b><span lang="EN-GB" style="font-size:11.0pt;line-height:120%;font-family:"Arial",sans-serif;color:#333333">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><a name="_Hlk529868512"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></b></a></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333">MARC AFFIRMS AA-<i><sub>IS</sub></i> RATING ON DUKE 3'S RM3.64 BILLION SUKUK<o:p></o:p></span></b></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></b></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">MARC has affirmed its rating of <b>AA-<i><sub>IS</sub></i></b> on toll concessionaire Lebuhraya DUKE Fasa 3 Sdn Bhd's (DUKE 3) RM3.64 billion Sukuk Wakalah with a <b>negative</b> outlook. Wholly owned by Ekovest Berhad, DUKE 3 is undertaking the design, construction, financing, operations and maintenance of Setiawangsa-Pantai Expressway (SPE), a 32-km elevated dual two-lane carriageway. The toll road project is being built under a concession agreement with the Government of Malaysia ending August 5, 2069. </span></span><span style="mso-bookmark:_Hlk529868512"><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The negative outlook reflects the rating agency's concerns over the continued regulatory uncertainties on the direction of the toll industry. In this regard, matured toll concessionaires which are able to generate sufficient cash flows and maintain healthy cash balance levels to meet financial obligations without substantial reliance on government compensation would be in a better position to weather any regulatory adjustments.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The affirmed rating is underpinned by the sufficient construction progress and adequately structured sukuk repayment profile that accommodates the ramp-up of traffic on the expressway. As at September 30, 2018, SPE's actual overall progress remains steady, standing at 42.40% against the planned progress of 42.35%, according to the independent consulting engineer. The rating agency also notes that any cost arising from delays would be passed to the engineering, procurement and construction (EPC) contractor through the back-to-back liquidated ascertained damages (LAD) arrangement of RM10,000 per day of delay under the fixed-sum contract. An irrevocable and unconditional bank guarantee of RM184.5 million (5% of EPC costs) further mitigates the construction cost overruns. <o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">As at October 31, 2018, DUKE 3 has incurred RM1.46 billion on the project while total designated account balances stood at RM2.74 billion. In respect of land required for construction of the expressway, as at September 30, 2018, DUKE 3 has utilised RM210.6 million for land acquisition purposes. As sizeable government funding of up to RM350 million has been set aside for land purchases, financial risk associated with land acquisition has been minimised. DUKE 3 expects to commence work on the remaining lots once they have taken formal possession by end-2018. MARC understands that DUKE 3 is waiting for the disbursement of the reimbursable interest assistance (RIA) amounting to RM460 million from the government. As at October 2018, DUKE 3 has only received its first payment of RM100 million from the government in July 2017.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">Under the latest base case cash projections, DUKE 3's projected minimum and average pre-distribution finance service cover ratios (FSCR) with cash balance stand at 2.24 times and 2.61 times during the sukuk tenure. The revised projections assume the disbursement of the remaining RIA of RM460 million in 1H2020, GST savings of RM56.2 million from the construction costs and higher interest income of RM88.5 million, among others. The sensitivity analysis indicates that the project cash flow can withstand up to a 13% construction cost overrun or 12 months' delay in the commencement of tolling operations before breaching the FSCR covenant of 1.50 times in 2023 and 2026. It also reveals that DUKE 3 is vulnerable to a breach in the equity-to-capital ratio of 16% by 2023. <o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The projections also show that in the event the initial traffic growth is around 23% during the ramp-up period (2020-2024), the traffic growth rate would subsequently have to register 6.5% per annum against 3.6% of operating expense growth to break even. Correspondingly, if the highway meets its projected initial traffic growth of 26% during the ramp-up period, DUKE 3 would break even with a traffic growth rate of 4.7% during the post ramp-up period (2025-2039).<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></b></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></b></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">Contacts: Ati Affira Kholid, +603-2717 2941/ </span></span><a href="mailto:affira@marc.com.my"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">affira@marc.com.my</span></span><span style="mso-bookmark:_Hlk529868512"></span></a><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">; David Lee, +603-2717 2955/ </span></span><a href="mailto:david@marc.com.my"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">david@marc.com.my</span></span><span style="mso-bookmark:_Hlk529868512"></span></a><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">November 14, 2018<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">[This announcement is available in MARC's corporate website at </span></span><a href="http://www.marc.com.my"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">http://www.marc.com.my</span></span><span style="mso-bookmark:_Hlk529868512"></span></a><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">]<o:p></o:p></span></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span style="mso-bookmark:_Hlk529868512"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">--- DISCLAIMER ---<o:p></o:p></span></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span style="mso-bookmark:_Hlk529868512"><i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span style="mso-bookmark:_Hlk529868512"><i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></i></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span style="mso-bookmark:_Hlk529868512"><b><span lang="EN-GB" style="font-size:9.0pt;font-family:"Arial",sans-serif">© 2018 Malaysian Rating Corporation Berhad</span></b></span><span style="mso-bookmark:_Hlk529868512"></span><span lang="EN-GB" style="font-size:9.0pt;font-family:"Arial",sans-serif"><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-66420938937288005392018-11-14T16:54:00.000+08:002018-11-14T16:55:03.644+08:00FW: MARC AFFIRMS AA-IS RATING ON SOUTHERN POWER’S SUKUK WAKALAH OF UP TO RM4.0 BILLION<div class="WordSection1"> <p class="MsoNormal"><b><o:p> </o:p></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal" align="center" style="mso-margin-top-alt:12.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in;text-align:center;page-break-after:avoid"> <b><span lang="DE" style="font-size:22.0pt;font-family:"Arial",sans-serif">P R E S S A N N O U N C E M E N T<o:p></o:p></span></b></p> <p class="MsoNormal"><span lang="DE" style="font-size:12.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" align="right" style="text-align:right;line-height:120%"><b><span lang="EN-GB" style="font-family:"Arial",sans-serif">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><b><span lang="EN-GB" style="font-family:"Arial",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><b><span lang="EN-GB" style="font-family:"Arial",sans-serif">MARC AFFIRMS AA-<i><sub>IS</sub></i> RATING ON SOUTHERN POWER'S SUKUK WAKALAH OF UP TO RM4.0 BILLION<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">MARC has affirmed its </span><b><span style="font-family:"Arial",sans-serif">AA-<i><sub>IS</sub></i></span></b><span style="font-family:"Arial",sans-serif"> </span><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">rating on Southern Power Generation Sdn Bhd's (Southern Power) Sukuk Wakalah of up to RM4.0 billion with a <b>stable</b> outlook. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">The affirmed rating primarily reflects Southern Power's predictable operational cash flow on the back of an availability-based tariff structure under a 21-year power purchase agreement (PPA) with Tenaga Nasional Berhad (TNB) (AAA/Stable). The absence of demand and fuel price risks offered under the PPA support the project fundamentals. The rating also considers the strong commitment from its shareholders, primarily through a two-way undertaking to address any shortfall in capital contributions from either of its two shareholders. The stable outlook incorporates MARC's expectation that the construction will progress on schedule and stay within the allocated budget. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">Southern Power is a 51:49 joint venture between TNB and SIPP Energy Sdn Bhd (SIPP), and was established to develop a 2x720-megawatt (MW) combined-cycle gas turbine power plant in Pasir Gudang, Johor. The scheduled commercial operation date (SCOD) for both units is July 1, 2020. The company has awarded the power plant development to an experienced consortium led by Taiwan-based CTCI Corporation (CTCI) and General Electric Energy Products France SNC (GE) under a fixed sum engineering, procurement and construction (EPC) contract. MARC opines that the involvement of the original equipment manufacturer GE under the EPC arrangement would enable technical and plant design problems to be minimised. Coupled with CTCI's prior experience in Malaysian power plant construction, the implementation and execution risks of the project are largely mitigated. As at September 25, 2018, the power plant project recorded actual physical progress of 58.7% against the planned progress of 53.8%.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">Construction and completion risks are further moderated by performance guarantees, warranties, liquidated damages (LD) for any delays and a contingency sum equivalent to 4.0% of the EPC cost of RM3,018.7 million, at an exchange rate of RM4.30/US$1.00. Southern Power has undertaken a hedging arrangement to address foreign exchange exposure as the EPC cost incorporates a US dollar portion of US$505.2 million. The total project cost is funded by a debt-to-equity mix of 80:20. The equity injection comprises ordinary share capital and redeemable preference shares (RPS) amounting to RM916.3 million in aggregate of which RM506.3 million from the subsequent RPS subscription will be used to repay the junior facility of the same amount. Any unpaid junior financing obligations post-COD will be backed by a rolling guarantee provided by the shareholders. In addition, TNB covenants to maintain at least 51% direct or indirect interest in Southern Power throughout the sukuk tenure. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">During the operational phase, Southern Power will receive capacity payments to cover its fixed operating expenses, financing obligations and shareholders' returns, all of which are subject to an unplanned outage rate of below 4% and a contracted average availability target of at least 94%. A key concern surrounding the project is the short operational track record of the gas turbine. In this regard, an independent technical advisor has assessed and opined that the operations and maintenance (O&M) risk mitigation measures for the project are adequate considering the availability of O&M performance guarantees and the long-term service agreement with the original gas turbine supplier. The plant's O&M will be carried out by TNB's wholly-owned subsidiary, TNB Repair and Maintenance Sdn Bhd under a 21-year O&M agreement (OMA). <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">Southern Power's average pre-distribution financial service cover ratio (FSCR) with cash balance throughout the sukuk tenure is projected at 1.94 times. The FSCR profile is relatively flat except in 2H2020 and 1H2021 (first operating period), due to uneven capacity rate financials (CRF). During the first operational period, Southern Power would need to rely on its cash buffer to meet its financing obligations as the Tier-1 CRF of 69% is lower than the Tier-2 CRF. The first sukuk principal repayment will commence in 2022. The projections also assumed that Southern Power will fully redeem its outstanding junior financing through proceeds from the RPS subscription at COD.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">Under MARC's sensitivity analysis, the project demonstrates moderate resilience against stressed scenarios including breaches of heat rate requirements and lower plant capacity. The risk of a severe plant underperformance is mitigated by the OMA's LD provisions as well as insurance protection. While completion delay would heighten cash flow mismatches, LD payments from the EPC contractor provide adequate cover for any potential loss of operational cash flow and delay penalty under the PPA. Consistent with its rated peers, the requirement to maintain an FSCR of 1.50 times post-distribution would ensure that Southern Power exercises prudence in its liquidity management, particularly during periods of plant underperformance.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify;line-height:12.0pt;mso-line-height-rule:exactly"> <span lang="EN-GB" style="font-family:"Arial",sans-serif">Contacts: Ati Affira Kholid, +603-2717 2941/ <a href="mailto:affira@marc.com.my"><span style="color:blue">affira@marc.com.my</span></a>; David Lee, +603-2717 2955/ <a href="mailto:david@marc.com.my"><span style="color:blue">david@marc.com.my</span></a>.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif">November 14, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">[This announcement is available in MARC's corporate website at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">--- DISCLAIMER ---<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <b><span lang="EN-GB" style="font-size:9.0pt;font-family:"Arial",sans-serif">© 2018 Malaysian Rating Corporation Berhad</span></b><span lang="EN-GB" style="font-size:9.0pt;font-family:"Arial",sans-serif"><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-80761769844857456302018-11-14T13:32:00.001+08:002018-11-14T13:32:34.926+08:00FW: MARC AFFIRMS KUWAIT FINANCE HOUSE (MALAYSIA)’S FINANCIAL INSTITUTION RATINGS OF AA+/MARC-1<div class="WordSection1"> <p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <h1><span lang="EN-GB" style="font-size:22.0pt;font-family:"Arial",sans-serif">P R E S S A N N O U N C E M E N T<o:p></o:p></span></h1> <p class="MsoHeading7" align="right" style="text-align:right"><b><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></p> <p class="MsoNormal"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoPlainText" style="text-align:justify"><b><span style="font-size:11.0pt;font-family:"Arial",sans-serif">MARC AFFIRMS KUWAIT FINANCE HOUSE (MALAYSIA)'S FINANCIAL INSTITUTION RATINGS OF AA+/MARC-1<o:p></o:p></span></b></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">MARC has affirmed Kuwait Finance House (Malaysia) Berhad's (KFH Malaysia) long-term and short-term financial institution (FI) ratings of <b>AA+</b>/<b>MARC-1</b> with a <b>stable</b> outlook. The FI ratings are based on Malaysia's national rating scale.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">KFH Malaysia's long-term FI rating has been notched down from its parent Kuwait Finance House KSC's (KFH) long-term FI rating of AAA, premised on MARC's expectation of continued strong parental support to its wholly-owned banking subsidiary. KFH's rating, in turn, is based on the assumption of a very high likelihood of support from the Kuwaiti government given its high systemic importance as the second-largest bank in Kuwait. KFH is majority-owned by the Kuwaiti government.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The stable ratings outlook assumes no change in the ownership structure of KFH and KFH Malaysia and that parental support from KFH will be forthcoming, if needed.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-MY" style="font-size:11.0pt;font-family:"Arial",sans-serif">As at end-June 2018, KFH Malaysia's </span><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">asset size stood at RM9.3 billion, a modest growth of 1.2% from end-2017 following a sharp decline from RM10.8 billion as at end-2016. The decline was largely a result of KFH Malaysia shedding its low-quality assets, particularly in the corporate segment, as part of a transformation programme it undertook in 2017. The programme also included rebalancing KFH Malaysia's financing portfolio to focus on the retail financing segment. Gross financing stood at RM5.9 billion as at end-June 2018 (2016: RM6.9 billion), of which household financing comprised 51.3%, up from 36.9% in 2016. The retail financing book, which is forecast to grow around 10% in 2018, is expected to be the key growth driver in the bank's financing portfolio going forward.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">MARC notes that the bank's asset quality has improved with total impaired financing declining to RM368.8 million as at end-June 2018 (2016: RM478.1 million). The improvement came on the back of recoveries and lower new impairments during the period, leading to higher financing loss coverage of 91.8% as at end-June 2018 (2016: 77.2%). The gross impaired financing (GIF) ratio reduced to 6.3% (2016: 7.0%), although it remained higher than the Islamic banking industry average of 1.3%. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">The rating agency observes that KFH Malaysia's capitalisation has remained strong, providing some buffer against any further asset quality weakness. Common Equity Tier 1 (CET1) capital and total capital ratios rose to 23.4% and 31.1% (2016: 20.3%; 27.7%) as risk-weighted assets declined in tandem with the bank's lower financing base. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">For 2017, KFH Malaysia's operating performance rebounded to register a net profit of RM5.2 million from a net loss of RM28.3 million in the previous year, mainly on the back of lower impairments and higher non-financing income. Net financing income fell due to lower gross financing and a decline in the net financing margin to 1.74% from 1.88%. <o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">For 1H2018, net financing income rose y-o-y, benefiting from a hike in the overnight policy rate during the period. Net profit rose to RM33.0 million in 1H2018 (1H2017: RM27.3 million). The bank's funding profile remained volatile given its dependence on wholesale deposits which accounted for<a name="_Hlk522200756"> 91.6% of the bank's total deposits as at end-June 2018. </a>This risk is mitigated by its holding of substantial liquid assets as reflected by its liquidity coverage ratio of 176.8%, higher than BNM's minimum requirement of 90% for 2018.<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif">KFH Malaysia continues to leverage on its parent's business expertise and benefits from the well-recognised KFH franchise. KFH is the second-largest bank in Kuwait with total assets of KWD17.1 billion (equivalent to RM227.8 billion), accounting for 26.5% of the Kuwaiti banking system as at end-June 2018. A potential merger with Bahrain-based Ahli United Bank BSC (AUH), which had total assets of about KWD10.0 billion as at end-2017, could further strengthen KFH's business franchise and market presence. KFH's capital adequacy remained strong with Tier 1 and total capital ratios standing at 16.0% and 17.8% as of end-2017; its asset quality has continued to improve, with the GIF ratio declining to 2.86% as at end-2017 (2016: 2.90%).<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><strong><span style="color:black;font-weight:normal"><o:p> </o:p></span></strong></p> <p class="MsoNormal" style="text-align:justify"><strong><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;font-weight:normal">Contacts: Douglas De Alwis, +603-2717 2965/ </span></strong><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif"><a href="mailto:douglas@marc.com.my">douglas@marc.com.my</a><b>; </b><strong><span style="font-family:"Arial",sans-serif;font-weight:normal">Sharidan Salleh, +603-2717 2954/<span style="color:black"> </span></span></strong><a href="mailto:sharidan@marc.com.my">sharidan@marc.com.my</a><span class="apple-style-span"><b><span style="color:black"> </span></b></span></span><b><o:p></o:p></b></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333">November 14, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">[This announcement is available in MARC's corporate website at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif">---- DISCLAIMER ----<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <b><span lang="EN-GB" style="font-family:"Arial",sans-serif">© 2018 Malaysian Rating Corporation Berhad<o:p></o:p></span></b></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <span lang="EN-GB"><o:p> </o:p></span></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-40020613982402908132018-11-12T13:32:00.001+08:002018-11-12T13:32:35.911+08:00FW: RAM Ratings reaffirms ratings of Tranches 1 to 5 of RCE Marketing-sponsored Class A Sukuk, upgrades ratings of Class B Sukuk<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 09 Nov 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has reaffirmed the ratings of the Class A Sukuk and upgraded the ratings of the Class B Sukuk for all tranches of the <i>Sukuk Murabahah</i> (the Sukuk) issued by Al Dzahab Assets Berhad (the Issuer). Al Dzahab is a special-purpose vehicle that had been incorporated to undertake the securitisation of personal-financing (PF) facilities originated through the business partners of RCE Marketing Sdn Bhd (RCEM or the Originator).<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">All the rated classes of the Sukuk carry a stable outlook, except the Tranche 5 Class B Notes, the outlook of which has been revised from stable to positive (refer to table below). These facilities are backed by their own respective discrete portfolios of PF receivables from civil servants. As these receivables are paid through non-discretionary salary deductions processed by the Accountant General’s Department and Angkatan Koperasi Kebangsaan Malaysia Berhad (better known as Angkasa), the transaction’s exposure to the credit risks of the borrowers is significantly reduced, as long as the borrowers remain in active service.<o:p></o:p></span></p> <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" width="100%" style="width:100.0%"> <tbody> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Sukuk Murabahah</span></i></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Issue Amount (RM million)</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Rating/Outlook</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Rating Action</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr> <td width="590" colspan="4" style="width:442.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Tranche 1</span></i></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class A<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">95.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Reaffirmed<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class B<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">25.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Upgraded from AA<sub>1</sub>/Positive<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Total rated<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">120.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> </tr> <tr> <td width="590" colspan="4" style="width:442.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Tranche 2</span></i></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class A<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">120.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Reaffirmed<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class B<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">35.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Upgraded from AA<sub>2</sub>/Positive<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Total rated<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">155.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> </tr> <tr style="height:10.5pt"> <td width="590" colspan="4" style="width:442.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:10.5pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Tranche 3</span></i></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr style="height:11.25pt"> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:11.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class A<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:11.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">110.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:11.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:11.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Reaffirmed<o:p></o:p></span></p> </td> </tr> <tr style="height:6.75pt"> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:6.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class B<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:6.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">45.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:6.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:6.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Upgraded from AA<sub>3</sub>/Positive<o:p></o:p></span></p> </td> </tr> <tr style="height:9.75pt"> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:9.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Total rated<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:9.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">155.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:9.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt;height:9.75pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> </tr> <tr> <td width="590" colspan="4" style="width:442.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Tranche 4</span></i></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class A<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">125.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Reaffirmed<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class B<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">35.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Upgraded from AA<sub>3</sub>/Stable<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Total rated<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">160.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> </tr> <tr> <td width="590" colspan="4" style="width:442.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Tranche 5</span></i></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class A<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">135.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AAA/Stable<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Reaffirmed<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Class B<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">45.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">AA<sub>1</sub>/Positive<o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Upgraded from AA<sub>3</sub>/Stable<o:p></o:p></span></p> </td> </tr> <tr> <td width="130" style="width:97.5pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Total rated<o:p></o:p></span></p> </td> <td width="180" style="width:135.0pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">180.0<o:p></o:p></span></p> </td> <td width="113" style="width:84.75pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> <td width="167" style="width:125.25pt;padding:2.25pt 2.25pt 2.25pt 2.25pt"> <p class="MsoNormal" align="center" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> </td> </tr> </tbody> </table> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The rating reaffirmation for all tranches of the Class A Sukuk is supported by the robust credit support available, which remains commensurate with an “AAA” stress scenario. The rating upgrade for all tranches of the Class B Sukuk is premised on their richer credit support, to a level supportive of a higher stress scenario under the revised ratings, primarily because of RAM’s revised default and prepayment assumptions for underlying portfolios. The positive outlook on the Tranche 5 Class B Notes reflects our expectation that its asset cover will improve to a level that corresponds to an AAA rating in the near term - if it maintains its current performance. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The revision of RAM’s loss assumptions on Al Dhazab’s transactions follows our review of the Originator’s newer historical monthly static portfolios (between January 2014 and February 2018), and is premised on the improved and consistent loss experience demonstrated by the newer static pools. This is in line with our observation of the securitised portfolios under Al Dzahab and other rated transactions with similar receivables. These improvements had followed refinements on RCEM’s credit scorecard (launched in May 2013) that are more stringent and in line with applicable regulatory changes (e.g. a 10-year maximum loan tenure, and credit approval based on the borrowers' net debt-servicing capacity). <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">While the contracts of some staff members have been terminated under the new government, RCEM’s exposure to contract staff is minor, at around 0.4% of its entire securitised portfolio. We also derive comfort from the Government’s assurance that it will not downsize the civil service and believe that the attrition rate for this segment will remain low. That said, the Government is studying the consolidation of agencies and ministries to avoid overlapping functions. This could result in higher incidences of transfers and, in turn, possibly more administrative delays in deductions. Prepayments may also deviate from our expectations, in the event the Government decides to extend the current retirement age. However, we believe this is unlikely at the moment as the Government is still considering all options and has indicated its priority of focusing on improving the country’s fiscal position and minimising its deficit. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Tan Han Nee<br> (603) 7628 1023 <br> <a href="mailto:hannee@ram.com.my">hannee@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="color:#1F497D">____________________________________________________________________________________________________________________________________________________________________________________</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#1F497D"><o:p></o:p></span></p> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-12628626676380945742018-11-09T15:51:00.001+08:002018-11-09T15:51:48.239+08:00FW: Implementation of sugar tax a negative development, but no immediate impact on F&N Holdings’ ratings<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><o:p> </o:p></b></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 09 Nov 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings views the recently announced excise duty on sweetened beverages as a negative development for Fraser & Neave Holdings Berhad (F&N Holdings or the Group). However, we do not expect it to have an immediate impact on the Group's ratings. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">As announced in Budget 2019, a 40 sen tax per litre will be imposed on drinks containing more than five grams of sugar or sugar-based sweetener per 100 ml, as well as fruit and vegetable juices with sugar content of more than 12 grams per 100 ml. The "sugar tax" will take effect on 1 April 2019. This will affect F&N Holdings' soft-drinks operations, which contribute almost 30% of the Group's revenue. Most of F&N Holdings' wide array of beverages (i.e. isotonic beverages, carbonated soft drinks, Asian soft drinks, tea, green tea, juice and water) in the ready-to-drink (RTD) market will be subject to the tax. This includes <i>100 Plus</i> (regular variant), the largest sales and profit contributor in the Group's soft-drinks division. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">The razor-thin operating margins of F&N Holdings' soft-drinks business leave little room for it to absorb cost increases without affecting its profitability. As such, we expect its heftier costs to be mostly passed on to consumers through higher product prices. If the sugar tax is fully passed on, the selling prices of the Group's key beverage products are estimated to rise between 10 sen and 60 sen (based on the existing prices of RM1.20-RM3.40 for 250 ml to 1.5 litre drinks).<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Despite the fairly minimal quantum of price increases, we expect demand to be negatively affected in the near term amid consumers' knee-jerk reaction. This will partly negate the impact from the generally more upbeat sentiment since the Pakatan Harapan government came into power in May 2018. Over the longer term, we expect the growth of the RTD market to stay subdued and largely driven by sales of bottled water, in line with consumers' increasing health awareness. Notably, the bottled-water segment is the only RTD sub-segment that registered a positive volume growth (+2.1%, by litre) in 2017. This contrasts against the overall RTD market's 5.5% contraction last year (2016: +3.8%) amid muted consumer sentiment and the spiralling cost of living. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">F&N Holdings' soft-drinks operations have been significantly affected by the competitive operating landscape, weak consumer sentiment and rising living costs in the last two years. The implementation of the sugar tax may exacerbate competition; big players such as The Coca-Cola Company possess deep pockets and have launched aggressive campaigns to wrest market share in the last few years. Given this, we do not expect the operating performance of F&N Holdings' soft-drinks division to improve meaningfully anytime soon. That said, the Group's dairy operations in Malaysia and Thailand are anticipated to anchor its performance, as was the case in fiscal 2017 and 2018. Even with a further weakening of its soft-drinks business, we envisage the Group's balance sheet and cashflow-protection metrics to remain strong, with a net-cash position and a funds from operations debt cover of close to 1 time. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">With this new development, we expect F&N Holdings to speed up its R&D efforts to reduce the sugar content in its beverages. In June 2018, the Group launched a lower-sugar variant of <i>100 Plus</i> (which falls outside the scope of the imminent sugar tax). Nonetheless, this variant accounts for just a small portion of its overall <i>100 Plus</i> sales.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">F&N Holdings' RM750 million MTN Programme (2013/2028) and RM750 million CP Programme (2013/2020) are issued by its funding conduit (i.e. F&N Capital Sdn Bhd) and carry respective ratings of AA1(s)/Stable and P1(s). The debt facilities are backed by full, unconditional and irrevocable corporate guarantees from F&N Holdings. As such, the issue ratings reflect the credit profile of the Group.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Amy Lo <br> (603) 7628 1078<br> <a href="mailto:amy@ram.com.my">amy@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="color:#1F497D">____________________________________________________________________________________________________________________________________________________________________________________</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#1F497D"><o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-MY"><o:p> </o:p></span></p> <p class="MsoNormal"><o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-84735849449482434252018-10-26T14:59:00.001+08:002018-10-26T14:59:59.959+08:00FW: MARC ASSIGNS PRELIMINARY RATING OF AAAIS(fg) TO MASTEEL’S RM130.0 MILLION GUARANTEED SUKUK IJARAH PROGRAMME<div class="WordSection1"> <p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></b></p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <h1><a name="OLE_LINK2"><span lang="PT-BR" style="font-size:22.0pt;font-family:"Arial",sans-serif;color:#333333">P R E S S A N N O U N C E M E N T<o:p></o:p></span></a></h1> <p class="MsoHeading7" align="right" style="margin:0in;margin-bottom:.0001pt;text-align:right"> <span style="mso-bookmark:OLE_LINK2"><b><span lang="PT-BR" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></b></span></p> <p class="MsoNormal" align="right" style="text-align:right;line-height:120%"><span style="mso-bookmark:OLE_LINK2"><b><span lang="EN-GB" style="font-size:11.0pt;line-height:120%;font-family:"Arial",sans-serif;color:#333333">FOR IMMEDIATE RELEASE<o:p></o:p></span></b></span></p> <p class="MsoNormal" align="right" style="text-align:right"><span style="mso-bookmark:OLE_LINK2"><span lang="EN-GB" style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></span></p> <span style="mso-bookmark:OLE_LINK2"></span> <p class="MsoBodyText3"><span lang="EN-GB" style="font-size:11.0pt;color:#333333;text-transform:uppercase">MARC ASSIGnS PRELIMINARY RATING OF </span><span style="font-size:11.0pt;color:#333333">AAA<i><sub>IS(fg)</sub></i></span><i><span style="font-size:11.0pt;font-family:"Tahoma",sans-serif;color:#333333"> </span></i><span lang="EN-GB" style="font-size:11.0pt;color:#333333;text-transform:uppercase">TO MASTEEL'S RM130.0 MILLION GUARANTEED SUKUK IJARAH PROGRAMME</span><span lang="EN-GB" style="font-size:11.0pt;color:#333333"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify;text-autospace:none"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><a name="_Hlk528260505"><span style="font-family:"Tahoma",sans-serif;color:#333333">MARC has assigned a preliminary rating of <b>AAA<i><sub>IS(fg)</sub></i></b><i> </i>to Malaysia Steel Works (KL) Bhd's (Masteel) proposed RM130.0 million Sukuk Ijarah Programme with a <b>stable</b> outlook. The assigned rating and outlook are based on the unconditional and irrevocable financial guarantee insurance provided by Danajamin Nasional Berhad (Danajamin) on which MARC has an insurer financial strength rating of AAA/stable and long-term counterparty credit rating of AAA/stable. </span></a><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">Masteel's standalone credit profile remains vulnerable to fluctuations in the price of steel, the cost of raw materials and regulatory changes. Given its relatively modest market position in the production of billets and bars mainly for local consumption, these factors have weighed on its profitability margins. At end-1Q2018, its combined total production capacity stood at 750,000 MT for billets and 700,000 MT for bars, achieving a rolling mill utilisation level of 74.6% for billets and 72.7% for bars (2016: 79.8%; 64.8%). <o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">Masteel's profitability has steadily improved over the last five-year period as output rose and product mix improved to include a higher proportion of bars which generate higher margin. The group has also benefitted from the implementation of duties on steel imports in September 2016 which has driven demand for locally produced steel. However, the recent slowdown in domestic construction and property activities has exerted some pressure on steel suppliers. Domestic bar prices peaked at RM2,750/MT in January 2018 before softening to RM2,445/MT in June 2018.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">In 1H2018, the company recorded weaker gross and operating margins of 7.5% and 4.4%, mainly attributable to a recent increase in key feedstock cost coupled with lower local steel prices. Masteel expects its performance to remain under pressure over the near term with a gross margin of RM225/MT in 2018, 3% lower than the RM232 achieved in 2017.<span style="background:yellow;mso-highlight:yellow"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333;background:yellow;mso-highlight:yellow"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">As at end-1H2018, Masteel's liquidity position remains modest with RM34.0 million in cash and equivalents and RM91.0 million in available credit facilities against short-term debt of RM285.8 million comprising mostly of bills payable and a term loan of RM32.5 million. The group's working capital requirement has risen alongside an increase in production capacity. Between 2013 and 2017, Masteel's total installed production capacity increased to 700,000 MT from 350,000 MT for bars and to 750,000 MT from 650,000 MT for billets. The expansion was mostly funded from internally generated funds. Its inventory days have increased to over 100 days, partly due to it holding a higher amount of scrap iron to offset rising input costs through larger purchases. Nonetheless, the company has improved its receivable days to below 40 days over the last three years. <o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">Masteel's gearing level is manageable, with debt-to-equity at 0.44 times and debt-to-EBITDA at 3.1 times. Given expectations of a moderate contraction in earnings on rising operating costs, MARC expects leverage to rise following issuance under this rated programme to 0.60 times debt-to-equity and between 3.5 to 4.0 times debt-to-EBITDA.<o:p></o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333"><o:p> </o:p></span></span></p> <p class="MsoNormal" style="text-align:justify"><span style="mso-bookmark:_Hlk528260505"><span lang="EN-GB" style="font-family:"Tahoma",sans-serif;color:#333333">Noteholders are insulated from downside risks in relation to Masteel's credit profile by the guarantee provided by Danajamin. Any changes in the supported rating or rating outlook will be primarily driven by changes in Danajamin's credit strength.<o:p></o:p></span></span></p> <span style="mso-bookmark:_Hlk528260505"></span> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">Contacts: Hari Vijay, +603-2717 2937/ </span><span lang="EN-GB"><a href="mailto:harivijay@marc.com.my"><span style="font-family:"Arial",sans-serif;color:#333333">harivijay@marc.com.my</span></a></span><span class="MsoHyperlink"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">;</span></span><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"> Wan Abdul Muiz Wan Abdul Ghafar, +603-2717 2939/ </span><span lang="EN-GB"><a href="mailto:muiz@marc.com.my"><span style="font-family:"Arial",sans-serif;color:#333333">muiz@marc.com.my</span></a></span><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif;color:#333333">October 26, 2018<o:p></o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:8.0pt;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" style="text-align:justify"><span lang="EN-GB" style="font-size:8.0pt;color:#333333"><o:p> </o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif;color:#333333"> [This announcement is available in MARC's corporate homepage at <a href="http://www.marc.com.my">http://www.marc.com.my</a>]<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;line-height:150%"><span lang="EN-GB" style="font-size:8.0pt;line-height:150%;font-family:"Arial",sans-serif;color:#333333">--- DISCLAIMER ---<o:p></o:p></span></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333">This communication is provided by Malaysian Rating Corporation Berhad (MARC) on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.<o:p></o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center;mso-line-height-alt:1.7pt"> <i><span lang="EN-GB" style="font-size:7.0pt;font-family:"Arial",sans-serif;color:#333333"><o:p> </o:p></span></i></p> <p class="MsoNormal" align="center" style="text-align:center"><b><span lang="EN-GB" style="color:#333333">© 2018 Malaysian Rating Corporation Berhad</span></b><span lang="EN-GB" style="color:#333333"><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p> <p class="style1">IMPORTANT NOTICE:<br> The information contained in this email and/or any attachment hereto is strictly confidential and privileged. If you are not the intended recipient, and/or have received this email in error, you must not copy, disseminate or disclose the contents of this message and/or any attachment to any other person. Please notify the sender and delete this message and any attachment from your system. Malaysian Rating Corporation Berhad ("MARC") accepts no liability in respect of prohibited and unauthorised use by an unintended addressee or recipient. Any opinion, view or other information in this message and/or any attachment hereto which does not relate to the official business of MARC is that of the individual sender. Although this email and/or any attachment is believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus-free and MARC accepts no responsibility for any loss or damage arising in any way from the use thereof. <o:p></o:p></p> <p class="style1"> <o:p></o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-39925702424075009502018-10-26T11:34:00.003+08:002018-10-26T11:34:28.569+08:00FW: RAM Ratings places Sarawak Power Generation’s rating on positive outlook<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><o:p> </o:p></b></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 26 Oct 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has revised the outlook on the AA2(s) rating of Sarawak Power Generation Sdn Bhd's (SPG or the Company) RM215 million Serial <i>Sukuk Musharakah</i> (2006/2021) (the Sukuk), to positive from stable. This follows the recent (in August 2018) revision of Sarawak Energy Berhad Group (SEB or the Group)'s rating outlook, also to positive from stable. The enhanced rating continues to reflect SEB's strong support for SPG, which the former owns via its 100% held subsidiary, SEB Power Sdn Bhd. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Syarikat SESCO Berhad (SESCO), a wholly owned subsidiary of SEB and SPG's sole off-taker, has been extending various forms of assistance to the Company. The most recent was in 2015, when SESCO allowed SPG to reset the rolling Equivalent Availability Factor (EAF) of Unit 8 of the Company's plant (the Plant) to enable it to minimise reductions in capacity revenue under the terms of its Power Purchase Agreement (PPA). This is further backed by a Letter of Support (LoS) from SESCO, dated 24 September 2007, in which it undertakes to ensure that SPG fully and promptly meets all its financial obligations in respect of the Sukuk throughout the tenure of the facility. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">SPG earns full Capacity Payments (CPs) as long as Units 7 and 8 of the Plant maintain a dependable capacity of 105 MW and a minimum EAF of 85%, regardless of the amount of electricity sold. However, Unit 9 earns Energy Payments on a take-or-pay basis. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">In 2017, the Plant's performance was affected by lengthy scheduled maintenance. At the same time, Unit 9 also faced operational challenges, which were eventually resolved in 1H 2018. We highlight, however, that the Company's CP losses are within our expectation. Meanwhile, the performance of Unit 7 and Unit 8 improved markedly in 1H 2018. Our sensitised cashflow projections indicate that SPG's minimum sukuk service coverage ratio (SSCR, with cash balances, post-distribution, calculated over a 12-month period on semi-annual principal repayment dates) will remain robust at around 1.50 times between 2018 and 2021. The Company has represented that it will prioritise its sukuk obligations over its capex, the repayment of advances to SEB and dividend distributions.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Typical of independent power producers, SPG is exposed to single-project risk. Additionally, the operations and maintenance (O&M) arrangement outlined in the PPA only covers broad issues of responsibility and compensation. Nevertheless, the absence of a formal O&M agreement between SPG and SESCO is unlikely to give rise to any dispute given the Group's strong commitment, as proven to date. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">SPG holds a licence to build, own and operate a 317-MW combined-cycle gas-turbine facility in Tanjung Kidurong, Bintulu, Sarawak. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Chinthamani Thanneermalai<br> (603) 7628 1013<br> <a href="mailto:chinthamani@ram.com.my">chinthamani@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> </span><o:p></o:p></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-91754674467602487422018-10-26T11:34:00.001+08:002018-10-26T11:34:14.701+08:00FW: RAM Ratings places Mukah Power’s rating on positive outlook<div class="WordSection1"> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><o:p> </o:p></b></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Published on</span></i></b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> 26 Oct 2018.</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">RAM Ratings has revised the outlook on the AA2(s) rating of Mukah Power Generation Sdn Bhd's (MPG or the Company) RM665 million Senior <i>Sukuk Mudharabah</i> Programme (2006/2021), to positive from stable. This follows the recent (in August 2018) revision of Sarawak Energy Berhad Group's (SEB or the Group) rating outlook, also to positive from stable. The enhanced rating continues to reflect SEB's strong support for MPG, which the former owns via its 100%-held subsidiary, SEB Power Sdn Bhd.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">In December 2017, a new Power Purchase Agreement (PPA) was inked between MPG and Syarikat SESCO Berhad (SESCO), a wholly owned subsidiary of SEB and MPG's sole off-taker, and was implemented from 1 January 2018. Support from SEB and SESCO have also taken the form of equity injection, a revision in tariffs for a specific period via a Supplementary Agreement signed in 2014 and the exclusion of major overhaul downtime in scheduled outages when computing MPG's Plant's (the Plant) equivalent availability factor for a specific span in 2016. Such assistance is also evident from a Letter of Support (LoS) – dated 21 August 2013 - extended to MPG by SESCO, in which the latter undertakes to ensure that the Company fully and promptly meets all its financial obligations in respect of the Senior Sukuk throughout the tenure of the facility.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">MPG's exposure to demand risk remains minimal under the terms of its new PPA with SESCO. The Company is entitled to full Capacity Payments, subject to meeting certain performance requirements. It is also entitled to Energy Payments for electricity sold. Under the new PPA, the Company is expected to be able to fully pass through its fuel costs as long as the Plant operates within allowable heat rates, as per the PPA.<o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">Since its inception, MPG's operating expenses have been exposed to cost fluctuations due to the absence of an operation and maintenance (O&M) agreement to allow for risk transfer to a third party. Based on our sensitivities, we expect MPG to register a minimum Senior Sukuk Coverage Ratio of 1.30 times throughout the tenure of the Sukuk as the Company projects hefty capex and O&M expenditure for the Plant between 2018 and 2021. Given the LoS and financial support from SESCO, we expect SEB to step in to meet any potential cash shortfall that the Company may face. As represented by the Company, we assume that there will be no distributions or subordinated payments to SEB. In the meantime, MPG remains exposed to single-project risk as it derives its income from a specific project. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif">MPG is an independent power producer incorporated to construct, own, operate and maintain a 270-MW coal-fired power plant in Mukah, Sarawak, under a 25-year PPA with SESCO, which will expire on 15 January 2034. <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> <o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Analytical contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Chinthamani Thanneermalai<br> (603) 7628 1013<br> <a href="mailto:chinthamani@ram.com.my">chinthamani@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Media contact</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <span style="font-size:12.0pt;font-family:"Times New Roman",serif"> </span><o:p></o:p></p> <p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify"> <o:p> </o:p></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0tag:blogger.com,1999:blog-5782842848498274625.post-34116752996535825252018-10-24T17:02:00.001+08:002018-10-24T17:02:06.599+08:00FW: RAM Ratings reaffirms AA1 rating of Indera Persada’s serial bonds<div class="WordSection1"> <p><em><b><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif"><o:p> </o:p></span></b></em></p> <p><em><b><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Published on</span></b></em><em><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"> 24 Oct 2018.</span></em><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"><o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">RAM Ratings has reaffirmed the AA1/Stable rating of Indera Persada Sdn Bhd's (Indera Persada or the Company) RM280 million Fixed Rate Serial Bonds (2013/2028). The reaffirmation of the rating reflects the Company's continued ability to generate healthy cashflow to service financial obligations under its Serial Bonds, despite some issues in the performance of its maintenance services. Despite RAM's stress-test assumptions of delays in monthly and lump-sum payments from the Public Works Department (PWD), Indera Persada is envisaged to register a strong debt service cover ratio (DSCR, with cash balances, post-distribution in payment months) of at least 1.51 times throughout the tenure of the Serial Bonds, supported by a steady inflow of Availability Charges (ACs).<o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">In return for the construction of the Centre of Excellence in Engineering and Technology (CREaTE) under a Concession Agreement (CA), Indera Persada is entitled to receive a highly predictable stream of monthly ACs from the PWD effective September 2016, for the next 15 years. This payment will be the sole source of repayment for the Serial Bonds. Indera Persada faces low counterparty risk as the ultimate obligor of monthly concession payments is the Government of Malaysia (GoM). <o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">To date, Indera Persada has incurred RM54,706 of monthly deductions on average, equivalent to 13.2% of the full eligible Maintenance Services Charges (MSCs). According to the management, the deductions are a result of disagreements over the quality of work performed by the Company. That said, likelihood of termination of the CA due to non-performance by Indera Persada is deemed low for the time being as the current level of deductions is well below the 25% trigger for three consecutive months that is required for the termination of the CA. We will continue to monitor the deduction levels for signs of further deterioration. <o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">The rating is moderated by the risk of delays in monthly ACs. In early 2018, payments were delayed by up to three months due to the implementation of a new IT system by the PWD. However, these payments are now back on schedule; the recurrence of such an event is deemed unlikely. <o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Despite the CA's stipulation that the reimbursement of ICT and training equipment as well as PFI costs must be made in a lumpsum payment, these amounts had subsequently been renegotiated into several instalments. To date, the PWD has yet to settle RM3.85 million of the ICT and training equipment costs. Our sensitised cashflow analysis has incorporated further delays in the receipt of these reimbursements from the PWD. Even so, Indera Persada's debt-servicing ability remains intact as it will be balanced by the delay in distributions to shareholders. <o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Despite the still-strong projected DSCRs, the buffer for the transaction has been reduced following the repayment of RM39.79 million to the Company's ultimate parent, Digistar Corporation Berhad in fiscal 2017. In addition, Digistar has issued a new, unrated Fixed Rate Serial Bond of up to RM80 million via its subsidiary, Jaya Persada Sdn Bhd. We expect the finance cost of the new bond issue to be partially serviced via distributions from Indera Persada. We highlight that the Company should be able to cumulatively distribute approximately RM41 million throughout the tenure of the Serial Bonds, without triggering a downward rating action. <o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Indera Persada is a single-purpose company set up to undertake the development of and provide asset-management services to CREaTE in Malacca, under an 18-year CA with the GoM dated 18 March 2013.<o:p></o:p></span></p> <p style="text-align:justify"><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"> <o:p></o:p></span></p> <p style="text-align:justify"><strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Analytical contact</span></strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"><br> Aw Wei Xuan<br> (603) 7628 1198<br> <a href="mailto:weixuan@ram.com.my">weixuan@ram.com.my</a><o:p></o:p></span></p> <p style="text-align:justify"><strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A">Media contact</span></strong><span lang="EN" style="font-size:10.0pt;font-family:"Verdana",sans-serif;color:#0A0A0A"><br> Padthma Subbiah<br> (603) 7628 1162<br> <a href="mailto:padthma@ram.com.my">padthma@ram.com.my</a><o:p></o:p></span></p> <div style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 1.0pt 0in"> <p class="MsoNormal" style="margin-bottom:12.0pt"><span lang="EN-MY"><o:p> </o:p></span></p> </div> <p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;mso-fareast-language:EN-MY"><o:p> </o:p></span></p> <p class="MsoNormal"><span lang="EN-MY"><o:p> </o:p></span></p> </div> The Blogger (63672674)http://www.blogger.com/profile/05765775043110862205noreply@blogger.com0