RAM Ratings assigns final AA3/Stable rating to Exsim Development-sponsored Tranche 1 IMTN

Published on 29 Jan 2019.

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RAM Ratings has assigned a final AA3/Stable rating to the RM290 million first issuance (Tranche 1 IMTN) under Exsim Capital Resources Berhad’s (Exsim Capital or the Issuer) RM2 billion Sukuk Musharakah Programme (IMTN Programme). The IMTN Programme allows Exsim Development Sdn Bhd or its subsidiaries (Exsim or the Group) to monetise progress billings, where the Group will from time to time sell to the Issuer its beneficial interest under respective sale and purchase agreements (SPAs) signed with buyers related to specific property development projects. Exsim will, in turn, use the sukuk proceeds to refinance its borrowings, fund working capital and acquire land. Future receipts under such agreements will be utilised to fund remaining construction costs of the identified projects, as well as to meet the Issuer’s fees, expenses and obligations under each sukuk issuance. Concurrently, Exsim Capital will also set up a RM1 billion Sukuk Murabahah ICP Programme (ICP Programme) alongside the IMTN Programme. The unrated ICP will act as a contingent line for the transaction. For Tranche 1 IMTN, the corresponding ICP will have a facility limit of RM130 million. Exsim Capital is a subsidiary and special-purpose vehicle of Exsim. 

Having reviewed the transaction documents for the IMTN Programme and the ICP Programme, we are satisfied that they reflect the intended transaction structure represented during the preliminary rating exercise. The final rating is also reflective of the latest construction progress up to 25 December 2018, project cashflow and sales progress as at end-November 2018. We have further taken into consideration the independent project certifier’s (IPC) view on the development projects based on the latest construction progress report, as well as the relevant legal and tax opinions. Overall, we find these to be in order and largely in line with our earlier assessment of the Tranche 1 IMTN announced on 29 November 2018. Please refer to our final rating rationale for further details on the assigned rating.

Upon closing, RAM will maintain surveillance of the transaction via monthly construction progress reports, project account statements, trustee reports and quarterly IPC reports to track the actual time and cost to completion against the developer’s targets. We expect to make an announcement on the progress of the projects semi-annually or as and when required. 


Analytical contact
Lim Chern Yit
(603) 7628 1035

Media contact
Padthma Subbiah
(603) 7628 1162


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2019 by RAM Rating Services Berhad

Rating Rationale

Ratings on Exsim Capital Resources Berhad