RAM Ratings has reaffirmed the AA3/Stable rating of Besraya (M) Sdn Bhd’s (the Company) RM700 million Sukuk Mudharabah Issuance Facility (2011/2028). Besraya is the toll concessionaire for the 16.6-km Sungai Besi Highway (SBH) and the 12.3-km Besraya Eastern Extension (BEE). The rating reflects the SBH’s strong traffic profile underpinned by its strategic alignment through populated townships and industrial areas, w

Published on 20 October 2016

RAM Ratings has reaffirmed the AA3/Stable rating of Besraya (M) Sdn Bhd’s (the Company) RM700 million Sukuk Mudharabah Issuance Facility (2011/2028). Besraya is the toll concessionaire for the 16.6-km Sungai Besi Highway (SBH) and the 12.3-km Besraya Eastern Extension (BEE). The rating reflects the SBH’s strong traffic profile underpinned by its strategic alignment through populated townships and industrial areas, which supports the Company’s sturdy debt-servicing capability.

Overall, total average daily traffic (ADT) cumulatively at both the Loke Yew and Mines plazas exceeded our expectations, growing a robust 8.7% y-o-y to 147,034 vehicles in fiscal 2016. This was due to the impressive 32.2% y-o-y ADT growth at the Loke Yew plaza, attributable to the BEE’s connectivity. Growth at the Loke Yew plaza was more than offset the slight 1% y-o-y decline at the Mines toll plaza due to the toll-rate hike (excluding buses) in October 2015. Moving ahead, we expect traffic growth at the Mines plaza to gradually recover to pre-rate hike levels.

Our sensitised cashflow projections indicate that Besraya’s FSCR (with cash balances, post-distribution) will remain intact, averaging 2.70 times throughout the remaining tenure of the Sukuk. However, in fiscal 2019, the FSCR (with cash balances) is expected to dip below 2 times – a one-off event– owing to the proposed upgrading work at the Kuchai interchange of the SBH. The upgrading work will be internally funded at a fixed cost of RM60 million over the next 3 fiscal years, with the elevated capex leaving no headroom for dividend distribution between fiscal 2017 and 2020. Distributions to shareholders (if any) would have to be supported by outperformance of our sensitised traffic and cashflow projection.

As with other toll-road projects, Besraya is inherently exposed to regulatory and single-project risks.

Analytical contact                                               Media contact
Ong Ju Laine                                                     Padthma Subbiah
(603) 7628 1183                                                (603) 7628 1162
julaine@ram.com.my                                         padthma@ram.com.my