RAM Ratings reaffirms enhanced AAA ratings of Silver Sparrow’s guaranteed MTN

Published on 31 Dec 2021.

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RAM Ratings has reaffirmed the AAA(fg)/AAA(bg)/Stable ratings of Silver Sparrow Berhad’s RM515 mil Guaranteed MTN Programme (2011/2023). 

The ratings reflect irrevocable and unconditional guarantees extended by Danajamin Nasional Berhad (rated AAA/Stable/P1 by RAM), Malayan Banking Berhad (AAA/Stable/P1) and OCBC Bank (Malaysia) Berhad (AAA/Stable/P1) on a proportionate basis. 

Silver Sparrow is a special-purpose vehicle set up as a funding conduit to issue the MTN. It is wholly owned by Aseana Properties Limited (the Group), a closed-end fund listed on the London Stock Exchange. Under the transaction, Aseana extended an unconditional and irrevocable corporate guarantee to the guarantors for the repayment of the MTN.

Subsequent to Silver Sparrow obtaining approval from the bondholders and guarantors, the programme’s tenure was extended for an additional two years to 8 December 2023. Accordingly, the outstanding RM100 mil of MTN (about USD25.0 mil) due on 8 December 2021 was rolled over for another year. With the extension, the Group would have more time to dispose of its assets.

Currently, the sale of City International Hospital (CIH, including adjacent land) in Vietnam and the RuMa Residences in Kuala Lumpur are pending due diligence and final approval from regulatory authorities. The sale and purchase agreements (SPAs) executed in August (CIH) and September 2021 (RuMa Residences) are expected to be completed in the next few months. RuMa Hotel is also in the process of being disposed, although the SPA is yet to be executed. Proceeds from the disposals will be used to pare down the Group’s borrowings. 

After settling loans secured for the said assets, the Group’s total debt load is expected to ease substantially from USD108.7 mil to about USD30.0 mil. Residual proceeds will go towards the repayment of the MTN. The surplus disposal proceeds, together with the existing RM10.0 mil in the transaction’s Debt Service Reserve Account, sufficiently cover outstanding MTN.

Aseana’s loss narrowed to USD1.19 mil in 1H FY Dec 2021 (1H FY Dec 2020: USD3.76 mil), thanks to various cost cutting efforts. Despite the challenging environment, Harbour Mall Sandakan managed to maintain its average occupancy rate at a high 95% as at end-September 2021 (end-December 2020: 95%). As part of its tenant retention strategy, the mall extended support to affected tenants in the form of rental relief. The gradual reopening of the economy since August 2021 and the lifting of interstate travel restrictions in October 2021 bode well for the Group’s mall and hotel businesses. With the gradual normalisation of the business environment, the mall has since seen a rebound in its footfall, recovering close to pre-pandemic levels. Bookings at RuMa Hotel also recovered back to about 70% at the weekends, although occupancy during weekdays remains fairly weak given the lack of business and international travelers.

At a general meeting on 28 May 2021, Aseana’s shareholders voted to extend the life of the Group to May 2023. If the assets are not disposed of by then, shareholders will again have the option to vote for Aseana’s continuation. Aseana’s demerger from Ireka Corporation Berhad, Legacy Essence Limited and other shareholders, which was to take place end-2020, did not materialise. 


Analytical contacts
Wong Ee Loo
(603) 3385 2521

Thong Mun Wai
(603) 3385 2522


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.

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