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

Published on 21 Feb 2020.

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RAM Ratings has assigned a final rating of AA3/Stable to the RM68 mil first issuance (Tranche 1 IMTN) under Exsim Ventures Berhad’s (Exsim Ventures or Issuer) RM2 bil Sukuk Musharakah Programme (IMTN Programme). As per the terms of the IMTN Programme, Exsim Development Sdn Bhd and/or any of its subsidiaries (Exsim Group or the Group) will, from time to time, sell to the Issuer their beneficial interest under the respective sale and purchase agreements (SPAs) signed with buyers related to specific commercial/retail property development projects. Future receipts under the SPAs will be used to fund remaining construction costs of the respective projects as well as to meet the Issuer’s fees, expenses and obligations in respect of each tranche of IMTN. 

Concurrently, the Issuer will establish an unrated RM35 mil Sukuk Murabahah ICP facility (Tranche 1 ICP) to be issued under a RM1 bil Sukuk Murabahah ICP Programme (ICP Programme) as a contingent line to meet any shortfalls in Tranche 1 IMTN obligations, as well as construction cost overruns and timing mismatches between the underlying project’s development costs and expected progress payments. The Tranche 1 ICP will be guaranteed by Danajamin Nasional Berhad (rated AAA/Stable/P1) and underwritten by United Overseas Bank (Malaysia) Bhd (rated AAA/Stable/P1).

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, project cashflow and sales progress as at end-January 2020. We have further taken into consideration the independent project certifier’s (IPC) view on the development project 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 19 December 2019. 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) 3385 2528

Media contact
Padthma Subbiah
(603) 3385 2577


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 2020 by RAM Rating Services Berhad

Rating Rationale

Ratings on Exsim Ventures Berhad