RAM Ratings assigns final ratings to Belleview Group-sponsored Sukuk Ijarah backed by Aman Central Mall

Published on 12 May 2021.

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RAM Ratings has assigned long-term final ratings (see table below) to the RM785 million First Tranche Sukuk Ijarah under AC First Genesis Berhad’s (the Issuer) RM3 billion Sukuk Ijarah Programme (the Programme). The facility is backed by Aman Central Mall (the Mall or Property), an eight-storey retail mall in Alor Setar, Kedah. The Issuer is a trust-owned special-purpose vehicle incorporated to facilitate the Programme, under which the Issuer will from time to time purchase relevant property(ies) from the seller, with funds from the issuance of Sukuk Ijarah. 


Sukuk Ijarah


Issue Size

(RM mil)

LTV (%)

FSCR (times)

Senior Class A





Senior Class B





Guaranteed Class C





Subordinated Class D





LTV = Loan to value
FSCR = Finance service coverage ratio

Proceeds from the issuance will be utilised by the Issuer to defray all relevant expenses under the Programme, prefund the relevant designated accounts and purchase the Mall from Great Realty Sdn Bhd. The latter will in turn use the disposal proceeds to refinance its borrowings, repay directors’ advances and distribute dividends to Belleview Sdn Bhd (the Group), its ultimate shareholder. RAM presently rates Great Realty’s RM170 mil Guaranteed MTN Programme. The Group is a niche property developer in the northern region, with projects mainly in Penang. 

Similar to most property-backed transactions, periodic payments for the Sukuk Ijarah will be fulfilled via the Mall’s net rental collections, with ultimate principal redemption met via refinancing, the exercise of the Property Sale Undertaking, Sukuk Ijarah Sale Undertaking or the sale of the Property by the Security Trustee in the open market via a power of attorney. 

Based on our assessment, we have ascribed a sustainable cashflow of RM41 million per annum to the Mall. Aman Central registered only a marginally higher Net Property Income (NPI) (+1% y-o-y) of about RM32 mil in FY Dec 2020 owing to rental rebates offered to selected tenants affected by movement restrictions. However, we expect its performance to gradually improve closer to our expectations over the next three years as a result of reduced operating costs, higher rental rates for renewed tenancies and anticipated lower rental rebates. Excluding rental support, Aman Central would have recorded a NPI of close to RM39 mil in 2020. 

Coupled with our view that the Property’s asset quality is above average, as reflected by its RAM property score of R-4.00 out of R-5.00, the resultant RM468.6 mil adjusted valuation of the Mall provides adequate credit enhancement for the respective ratings assigned to the Senior Class Sukuk Ijarah. The Guaranteed Class C Sukuk to be guaranteed by Danajamin Nasional Berhad will be unrated. The Subordinated Class D Sukuk Ijarah will be unrated and may be fully subscribed by the Originator and/or its directors.

Aman Central is strategically located in Alor Setar’s prime business district and enjoys good accessibility from the city’s main arteries. It is also the only well-managed Mall in the city with diverse offerings, which limits direct competition. These factors have contributed to the Mall’s healthy average occupancy rate of above 85% since opening, with an improved average rental rate y-o-y, except for FY Dec 2020 owing to rental rebates. 

The Mall’s tenancy expiry profile, however, is lumpy as 77% of its leases will mature this year. Of that, about 11% have been renewed, while tenants accounting for another 77%, including three anchor tenants, have indicated a strong intention to renew. The remaining leases are currently under negotiation for potential relocation and reconfiguration. Renewed tenancies have seen rental rates rise by between 5% and 8% for the tenancy renewal period. Given the Mall’s competitive advantage over older shopping malls in the vicinity and a lack of new incoming supply, we expect renewals or tenant replacements to be manageable despite present challenges.

The ratings are further supported by the transaction’s structural features, with covenants to control potential cashflow leakage to the Subordinated Class D Sukuk Ijarah. Such features are also incorporated to initiate disposal of the Property to ensure timely principal repayment of the Sukuk Ijarah by the legal maturity date. A pre-funded nine months’ profit reserve for the Senior Sukuk is viewed as adequate to ensure continued servicing of periodic distribution obligations during the disposal period. We expect the transaction’s overall leverage to reduce in Year 3 and 5 due to the partial amortisation of the Senior Class Sukuk Ijarah.

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 2021 by RAM Rating Services Berhad


Rating Rationale

Ratings on AC First Genesis Berhad