RAM Ratings has reaffirmed the AA1/Stable rating of GB3 Sdn Bhd’s (GB3 or the Company) RM850 million Senior Secured Al-Bai Bithaman Ajil Bond Facility (2001/2014) (the Bonds).

Published on 01 July 2014

RAM Ratings has reaffirmed the AA1/Stable rating of GB3 Sdn Bhd’s (GB3 or the Company) RM850 million Senior Secured Al-Bai Bithaman Ajil Bond Facility (2001/2014) (the Bonds). GB3 is an independent power producer (IPP), operating a 640-MW combined-cycle, gas-turbine power plant in Lumut, Perak.
The rating remains supported by GB3’s strong business profile, underscored by the favourable terms of its Power Purchase Agreement (PPA) with Tenaga Nasional Berhad (TNB), its satisfactory operating record and ample liquidity that supports its debt-servicing ability. As with other IPPs, the Company is exposed to inherent regulatory and single-project risks, which moderate its rating.
For the period under review, GB3 delivered a satisfactory operational performance, able to earn full available capacity payments and fully pass-through its fuel costs to TNB. This, coupled with no dividend distributions to shareholders, led to a robust finance service cover ratio of 2.04 times (with cash balances, post-distribution) as at the Company’s last principal repayment date (19 December 2013). GB3’s cash and bank balances of RM179.69 million as at end-December 2013 will be sufficient to fully cover final obligations of RM140.4 million in respect of the Bonds (principal and profit payments) falling due in December 2014.

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