RAM Ratings assigns final AA3/Stable rating to Exsim Capital’s Tranche 3 IMTN

Published on 03 Mar 2022.

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RAM Ratings has assigned a final rating of AA3/Stable to the RM300 mil third issuance (Tranche 3 IMTN) under Exsim Capital Resources Berhad’s (Exsim Capital or the Issuer) RM2 bil Sukuk Musharakah Programme (IMTN Programme). The issue size has been reduced from the RM315 mil assessed during our preliminary rating exercise at the Issuer’s request on the advice of the Lead Arranger, United Overseas Bank (Malaysia) Bhd.

The IMTN Programme allows for the monetisation of progress billings by Exsim Development Sdn Bhd or its subsidiaries (Exsim or the Group), where the Group will from time to time sell to the Issuer its beneficial interest under respective sale and purchase agreements (SPAs) signed with buyers related to specific property development projects. Future receipts under the SPAs will be used to fund remaining construction costs of the identified project and to meet the Issuer’s fees, expenses and obligations in respect of each sukuk issuance. Exsim Capital is a subsidiary and special-purpose vehicle of Exsim. 

Concurrent with the Tranche 3 IMTN, the Issuer will establish an unrated RM75 mil Sukuk Murabahah ICP (Tranche 3 ICP) facility under its RM1 bil Sukuk Murabahah ICP Programme. The unrated Tranche 3 ICP will act as a liquidity line to cover shortfalls in profit payments and senior expenses in respect of the Tranche 3 IMTN, construction cost overruns and/or timing mismatches between the relevant project’s development costs and progress payment receipts. 

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. In our analysis of the project cashflow, we have taken into account sales progress up to 31 January 2022 and construction progress as at 8 February 2022, as well as the 46-day extension of time granted to the contractor by Exsim. We have also taken into consideration the independent project certifier’s (IPC) view on the project based on the latest progress report, as well as relevant legal and tax opinions. Overall, we find these to be in order and largely in line with our earlier assessment of the Tranche 3 IMTN announced on 27 October 2021. Please refer to our final rating rationale for further details.

Upon closing, RAM will maintain surveillance of the transaction via monthly construction progress reports, project account statements, trustee reports and quarterly IPC reports. We expect to announce the progress of the project semi-annually or as and when required.


Analytical contacts
Kaylee Chiah 
(603) 3385 2515

Lim Chern Yit
(603) 3385 2528


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
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Rating Rationale

Ratings on Exsim Capital Resources Berhad