Published on 17 Mar 2021.
RAM Ratings has assigned a final rating of AAA/Stable to the proposed RM555 mil Senior Notes to be issued under Glacier Assets Berhad’s (Glacier Assets or the Issuer) Asset-backed Medium-Term Notes facility (the MTN Facility). The proposed issuance involves seven tranches of Senior Notes with yearly repayments and an unrated tranche of Junior Notes. Ranking above the Junior Notes, the Senior Notes will be backed by receivables due from Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH or the Obligor).
Glacier Assets was set up by Gamuda Water Sdn Bhd (Gamuda Water or the Originator) to monetise the balance of receivables under the Termination and Settlement Agreement1 (TSA) between Pengurusan Air Selangor Sdn Bhd (Air Selangor), SPLASH and Gamuda Water. Forming a key part of the resolution of long drawn-out negotiations on Selangor’s water restructuring exercise, the TSA relates to the settlement of receivables owing from SPLASH to Gamuda Water for the supply of treated water and operations and maintenance works performed. Although the primary payment obligation lies with SPLASH, Air Selangor – its parent company – will pay Gamuda Water any missed instalments within a predefined period of the scheduled due dates. In this regard, the rating assigned to the Senior Notes is underpinned by Air Selangor’s credit profile which in turn mirrors that of the Selangor state government.
In assigning the final rating, we have reviewed all relevant transaction documents as well as assumptions applied in the transaction’s cashflow model. We find these to be in line with our expectations when we assigned the preliminary rating on 3 December 2020. The Senior Notes will be backed by the remaining eight yearly instalments of the Settlement Sum and Cut-Over Sum totalling RM613.96 mil, with interest charges of 5.25% per annum, to be sold to the Issuer by way of absolute legal assignment.
RAM will monitor the transaction’s performance on a regular basis via semi-annual reports on designated account balances, including details on amounts held in permitted investments. We will keep the rating under surveillance as long as the Senior Notes remain outstanding.
1 As amended and supplemented by the Supplemental Termination and Settlement Agreement dated 18 May 2020.
Lee Siew Xuen
(603) 3385 2539
Tan Han Nee
(603) 3385 2529
(603) 3385 2577
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