MARC has affirmed its AAAIS rating on Putrajaya Bina Sdn Bhd’s (PBSB) RM1.58 billion Islamic Medium-Term Notes (Sukuk Wakalah) Programme. The rating outlook is stable.
The affirmed rating is mainly driven by the credit strength of the payment stream from the Malaysian government in the form of availability charges (AC), the quantum of which is sufficient to meet the financial obligations under the rated programme. The rating is also supported by PBSB’s status as a wholly-owned subsidiary of Putrajaya Holdings Sdn Bhd (PJH, rated AAA/Stable).
PBSB receives AC payments totalling RM215.6 million p.a. under a 25-year asset management phase that commenced in December 2019. It had completed the development of nine blocks of government office buildings and one block of shared facilities in Parcel F, Precinct 1 in Putrajaya in April 2019. The company receives maintenance charges (MC) of RM69.2 million p.a. subject to meeting specified key performance indicators (KPI).
PBSB is required to maintain funds equivalent to its principal and profit repayment, one month ahead of its due date at all times, as well as to maintain a minimum Financial Service Cover Ratio (FSCR) of 1.50x following any dividend payment. Under the rating case, the company would achieve an average FSCR of 4.37x throughout the tenure of the outstanding sukuk. In the unlikely event of non-receipt of MC payments during the tenure of the rated programme, MARC’s sensitivity analysis shows that the FSCR will range between 2.09x and 7.82x. Given the low complexity of work involved in buildings maintenance and the proven track record of the facilities management companies contracted to undertake the maintenance, the risk of not meeting the set KPIs is deemed low.
-Ends-
Contacts:
Glenn Wong Liu Yu, +603-2717 2961 / liuyu@marc.com.my
Umar Abdul Aziz, +603-2717 2962 / umar@marc.com.my
Taufiq Kamal, +603-2717 2951 / taufiq@marc.com.my
[This announcement is available on MARC’s corporate website at www.marc.com.my ]
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This communication is provided by Malaysian Rating Corporation Berhad (MARC) based on 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.
© Press Release 2021
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