Published on 16 Feb 2023.
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.
Seri Nuralya Munawir
(603) 3385 2484
Davinder Kaur Gill
(603) 3385 2525
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Ratings on Northern Gateway Infrastructure Sdn Bhd