Find A Rating 
PRESS RELEASES
RAM Ratings reaffirms Jati Cakerawala’s sukuk at AA3/Stable
Published on 20 Dec 2022.
RAM Ratings has reaffirmed the AA3/Stable rating of Jati Cakerawala Sdn Bhd’s (Jati or the Company) RM540 mil Sukuk Murabahah (2013/2023), premised on its strong cashflow coverage that is supported by dividend distributions from its sole subsidiary, Teknologi Tenaga Perlis Consortium Sdn Bhd (TTPC).
TTPC is an independent power producer which owns and operates a 650 MW combined-cycle, gas turbine power plant in Perlis. The plant’s sound operational performance and cashflow generating ability underline the AA1/Stable rating of TTPC’s RM835 mil Sukuk Murabahah (2013/2023).
The two-notch differential between the sukuk ratings of Jati and TTPC considers the low level of subordination of the Company’s sukuk based on its financing terms, in addition to its strong debt coverage level. TTPC can only declare dividends to its shareholders (i.e., Jati and Tenaga Nasional Berhad) upon meeting its own financing obligations and the necessary cash-trap requirements stipulated by its covenants. As such, Jati’s sukuk is structurally subordinated to TTPC’s sukuk in terms of cashflow priority and security.
Jati’s subordinated finance service coverage ratio (sub-FSCR) on the latest repayment date of its sukuk (31 July 2022) stood at 1.56 times, exceeding our earlier projection of 1.50 times due to lower-than-expected dividend distributions to the Company’s shareholders in FY Sep 2022. RAM’s stressed scenario projects that Jati will receive total dividend income of RM202.94 mil in FY Sep 2023. This is anticipated to comfortably cover the last two principal and profit payments of the RM540 mil sukuk, totalling RM119.55 mil, in 2023.
Analytical contacts
Zachary Tan
(603) 3385 2612
zachary@ram.com.my
Chong Van Nee, CFA
(603) 3385 2482
vannee@ram.com.my
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 2022 by RAM Rating Services Berhad
