Outstanding issues resolved; Northern Gateway fulfils remaining conditions subsequent for AA1-rated MTN Programme

Published on 16 Feb 2023.

Share Tweet Email

Northern Gateway Infrastructure Sdn Bhd (the Company) has met critical conditions subsequent (CS) under its RM340 mil MTN Programme (2017/2034) - last rated AA1/Stable - within the extended deadline provided by noteholders. These include (i) the formal execution of the lease and sub-lease agreements with the Federal Lands Commissioner (FLC), and (ii) granting the security trustee a power of attorney in respect of these agreements. An acknowledgement of and consent to the Notice of Security Assignment from the FLC – which Northern Gateway is obligated to obtain by 31 December 2023 – is pending. Concession payments previously withheld pending the inking of these agreements, have since been paid promptly.
Though the transaction’s security arrangement has yet to be fully perfected, we do not deem this to compromise the MTN’s credit strength, and the risk of the transaction being called into a default event as a result of it, highly remote. We see the recent events as supportive of preserving the MTN’s current rating, which is further anchored by Northern Gateway’s strong debt servicing ability, thanks to a healthy cash reserve and the steady inflow of monthly availability charges. We will continue to monitor the Company’s progress in delivering the FLC’s official acknowledgement and consent by year-end.  

Northern Gateway was awarded a concession by the Government of Malaysia, via the Ministry of Home Affairs, for the construction and maintenance of the immigration, customs, quarantine and security complex in Bukit Kayu Hitam, Kedah. Meeting CS was delayed in the past due to movement restrictions and administrative hiccups in land transfers during the pandemic.  


Analytical contacts
Seri Nuralya Munawir
(603) 3385 2484

Davinder Kaur Gill
(603) 3385 2525


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 2023 by RAM Rating Services Berhad

Ratings on Northern Gateway Infrastructure Sdn Bhd