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

Published on 10 Feb 2023.

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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 (Aseana or the Group), a closed-end fund listed on the London Stock Exchange. Under the transaction, Aseana has extended an unconditional and irrevocable corporate guarantee to the guarantors for the repayment of the MTN.

Of the two sale and purchase agreements (SPAs) executed by Aseana in 2021, only the disposal of City International Hospital in Vietnam (including adjacent land) materialised over the period in review. Proceeds from the sale were partially used to repay RM39 mil of outstanding MTNs in 1H FY Dec 2022. The SPA for 58 residential units at the RuMa Hotel and Residences in Kuala Lumpur was however, terminated in August 2022 due to the non-fulfilment of some agreement terms. As a result, Aseana had to rollover the remaining RM61 mil of MTNs outstanding originally due on 8 December 2022, for another year to 8 December 2023, coinciding with the maturity of the programme. 

Aseana’s pre-tax loss widened to USD12.54 mil in 1H fiscal 2022 (fiscal 2021: USD4.85 mil). Despite Malaysia lifting interstate and overseas travel bans in 2H 2021, borders were reopened to non-residents only from 1 April 2022. The lack of international tourists challenged the Group’s hotel segment, seeing the RuMa Hotel register occupancy of just 32% in 1H fiscal 2022. Harbour Mall Sandakan’s high average occupancy rate of above 95% and recovery in its recent footfall figures to pre-pandemic levels were however, not sufficient to offset that loss. Aside from its reducing top line, Aseana’s pre-tax loss was further attributed to the period’s higher expenses, including the RuMa Guaranteed Rental Return and several non-recurring expenses such as the loss from the disposal of Vietnamese assets as well as foreign exchange losses. 

The lighter debt load subsequent to asset disposals helped moderate Aseana’s gearing to 0.45 times as at end-June 2022. The Group’s cash reserve of USD8.85 mil on the same date, while falling short of the amount required to meet near-term debt obligations, is enough to cover future MTN coupon payments. 

At a general meeting in May 2021, Aseana’s shareholders voted to extend the life of the Group to May 2023. If remaining assets are not disposed of by then, shareholders will have the option to vote for its continuation.


Analytical contacts
Seri Nuralya Munawir
(603) 3385 2484

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.

Published by RAM Rating Services Berhad
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