RAM Ratings reaffirms rating of Swirl Assets’ Senior Notes backed by receivables due from Air Selangor

Published on 07 Nov 2022.

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RAM Ratings has reaffirmed the AAA/Stable rating of the RM595 mil Senior Notes under Swirl Assets Berhad’s (the Issuer) RM700 mil Asset-Backed Medium-Term Notes Facility. The Senior Notes rank above the unrated Junior Notes (collectively, the Notes) under the facility. 

The transaction is structured to monetise the balance of receivables due under the Share Purchase Agreement (SPA) dated 28 September 2018 between Syarikat Pengeluar Air Selangor Holdings Bhd (SPLASH Holdings or the Originator) and Pengurusan Air Selangor Sdn Bhd (Air Selangor or the Obligor). The SPA formalises the Obligor’s purchase of the Originator’s entire stake in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH). 

The reaffirmed rating reflects Air Selangor’s credit profile in its role as the Obligor for the annual instalments payable under the SPA. Air Selangor – Malaysia’s largest water operator – is the sole licence holder of water supply and distribution services in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. It plays a critical public policy role to the Selangor state government. The highly anticipated support from the state in times of financial distress underpins our view that the Obligor’s credit strength mirrors that of the state. 

The SPA allows Air Selangor to prepay, in part or in full, remaining annual instalments together with accrued interests payable under the terms. Prepayment terms of the Senior Notes, which mirror the terms of the Obligor’s early redemption option under the SPA, minimise potential negative carry risk. The transaction includes a pre-funded maintenance account for the Issuer’s annual expenses over the life of the Notes and a pre-funded Early Redemption Account to cover early redemption premiums on the Senior Notes, if any. Funds in the Settlement Account cannot be used to make payments in respect of the Junior Notes until all Senior Notes have been fully redeemed. This mitigates cashflow leakage. The rating does not reflect the prepayment risk on the Notes. 

As at 30 September 2022, Swirl received all scheduled annual payment from Air Selangor and redeemed RM70 mil Tranche 1 and RM75 mil Tranche 2, on their respective maturity dates. The designated accounts report as at end-September 2022 indicates that the actual transaction expenses incurred were largely in line with the levels estimated. 


Analytical contacts
Joel Thum
(603) 3385 2517

Tan Han Nee
(603) 3385 2529


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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