Published on 15 Sep 2022.
RAM Ratings has assigned a final rating of AAA/Stable to the RM1.20 bil second issuance (Second Tranche MTN) under IGB REIT Capital Sdn Bhd’s (the Issuer) RM5.0 bil MTN Programme (the Programme).
A wholly owned subsidiary of IGB Real Estate Investment Trust (IGB REIT), IGB REIT Capital is a special-purpose vehicle incorporated to facilitate the fundraising exercise under the Programme. The Second Tranche MTN will be secured against Mid Valley Megamall (the Mall), with issuance proceeds used to redeem the outstanding RM1.20 bil First Tranche MTN on the expected maturity date of 20 September 2022. Located in Mid Valley City, the Mall is a five-level retail property with one mezzanine floor, two basement and four elevated car park levels. As at end-June 2022, its market value stood at RM3.67 bil.
RAM views the overall quality of the Mall as exceptional, with a RAM Property Score of R-4.65 (out of a maximum of R-5.00). This is anchored by its strategic location, diversified tenant base, healthy lease maturity profile and experienced and capable management, among other factors. Based on our adjusted valuation of RM3.63 bil for the Mall, the resultant loan to value ratio of 33.1% and stressed debt service coverage ratio of 2.84 times indicate strong credit support for the Second Tranche MTN.
In assigning the final rating, we have considered the final coupon rate and transaction structure and reviewed all relevant transaction documents. We find these to be in line with our expectations when we assigned the preliminary rating, published on 11 August 2022. Please refer to our final rating rationale for further details on the assigned rating.
Liew Kar Ling
(603) 3385 2586
Lim Chern Yit
(603) 3385 2528
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Ratings on IGB REIT Capital Sdn Bhd