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RAM Ratings affirms TRIplc Ventures’ AAA(bg)/Stable issue rating
Published on 25 Jun 2024.
RAM Ratings has affirmed the AAA(bg)/Stable rating of TRIplc Ventures Sdn Bhd’s (TVSB) MTN Programme of up to RM240 mil in nominal value (2011/2026). The rating reflects an irrevocable and unconditional bank guarantee on the programme from Bank Pembangunan Malaysia Berhad (rated AAA/Stable/P1 by RAM).
TVSB is the concessionaire for the development and maintenance of Zone 1 Phase 2 of the Universiti Teknologi Mara (UiTM) campus in Puncak Alam under a 23-year concession agreement (CA). Repayments of the MTN will be met by concession payments received by TVSB in the form of monthly Availability Charges and Maintenance Charges (MCs).
Since the commencement of the maintenance period, TVSB has maintained its key performance indicator (KPIs) well above the CA requirement of 93% (2023: 99.91%). Failure to meet KPIs will lead to the imposition of demerit penalties and MC deductions. Net performance-related deductions last year were minimal. The timeliness of concession payments is key as any delay may adversely affect TVSB’s debt servicing ability and liquidity. To date, payments from UiTM have been within RAM’s stressed assumption of three months.
We expect TVSB’s debt servicing ability to remain strong going forward, with projected minimum and average debt service coverage ratios (DSCRs) (with cash, calculated over a 12-month period on profit/principal payment months) of above 1.50 times. Our analysis assumes annual distributions to TVSB’s sister company, Pujian Bayu Sdn Bhd, in the form of dividends and Junior Note repayments (up to 2034) to enable the latter to repay its own MTNs (rated AA3/Stable by RAM). Without these, TVSB’s DSCRs would be higher.
While CA termination risk is remote given the non-complex nature of maintenance, TVSB is entitled to compensation if the CA is terminated. As with most concession-related companies, TVSB is exposed to single-project risk, where a force majeure or major operational failure may disrupt its entire operations.
Analytical contacts
Lee Cheng En
(603) 3385 2506
chengen@ram.com.my
Davinder Kaur Gill
(603) 3385 2525
davinder@ram.com.my
Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@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 2024 by RAM Rating Services Berhad
