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RAM Ratings assigns final AAA(fg)/Stable rating to INTI’s proposed MTN
Published on 01 Nov 2023.
RAM Ratings has assigned a final rating of AAA(fg)/Stable to INTI Universal Holdings Sdn Bhd’s (INTI or the Group) proposed RM300.0 mil Medium-Term Notes Programme (proposed MTN). In doing so, we have reviewed all relevant transaction documents and found them to be in line with our expectations when the preliminary rating was assigned (published on 18 July 2023).
The enhanced rating reflects an irrevocable and unconditional guarantee provided by Credit Guarantee and Investment Facility (rated AAA/Stable/P1 by RAM).
Founded in 1986, INTI operates one university in Negeri Sembilan and a college each in Selangor, Penang and Sabah, offering pre-university, undergraduate and postgraduate programmes as well as professional certificates. INTI is 51% owned by Hope Education Group (Hong Kong) Co Ltd (made up of 49% from Hope Education Group HK and 2% from the trustee of Hope Education Group HK), while the remaining shares are held by a local private company – Intisari Tadbir Sdn Bhd. The proceeds of the proposed MTN are intended for operating expenditure for campuses in Nilai, Penang and Subang.
Excluding the guarantee, INTI’s credit profile reflects its established brand name and track record in the private higher education sector. Ranking in the top 10% of public and private higher education institutions in Malaysia, the Group is geographically diversified by virtue of its presence in the four states. INTI’s funds from operations debt cover are anticipated to remain strong despite a heftier debt load following the expected one-off drawdown of RM165 mil from the proposed MTN programme.
Moderating INTI’s standalone credit profile is its planned adoption of a more aggressive financial policy going forward, a departure from its historically conservative balance sheet. Once the MTN is issued, our projection which also incorporates dividend payouts to shareholders will result in the Group’s projected gearing ratio to peak at over 1.5 times. Additionally, INTI operates in a highly competitive industry, exposed to the risk of regulatory changes and industry disruptions.
Analytical contacts
Wong Ee Loo
(603) 3385 2521
eeloo@ram.com.my
Thong Mun Wai
(603) 3385 2522
munwai@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.
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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
