Published on 19 Dec 2019.
RAM Ratings has reaffirmed the A1/Stable rating of Jati Cakerawala Sdn Bhd’s (Jati or the Company) RM540 mil Sukuk Murabahah (2013/2023). Purely an investment-holding company, Jati’s sole source of cashflow – dividend distributions from Teknologi Tenaga Perlis Consortium Sdn Bhd (TTPC) – has remained steady given the latter’s robust operational metrics and cash-generating aptitude. TTPC is an independent power producer that owns and operates a 650 MW combined-cycle, gas-turbine power plant in Perlis.
The rating of Jati’s Sukuk Murabahah is three notches lower from the AA1/Stable rating of TTPC’s sukuk, premised on the lower priority on Jati’s debt facility in terms of both cashflow waterfall and security relative to TTPC’s. The three-notch rating differential reflects the low level of subordination of Jati’s Sukuk Murabahah and the Company’s adequate debt coverage throughout its remaining tenure.
TTPC has been outperforming our expectations, leading to improvements in Jati’s cashflow. Jati’s subordinated finance service ratio stood at 1.52 times (with cash balances, post-distribution) on 31 July 2019, surpassing our earlier projection of 1.44 times. Based on the Company’s intention of maximising dividend payments so long as its distribution covenant permits, we expect this ratio to reach a minimum of 1.40 times throughout the remaining tenure of the Sukuk Murabahah – a level that is commensurate with an A1 rating.
Irfan Afifah Mohd Zaki
(603) 3385 2551
(603) 3385 2577
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Ratings on Jati Cakerawala Sdn Bhd