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RAM Ratings assigns final AA1 rating to SEP Resources' RM185 mil ASEAN Sustainability SRI Sukuk Wakalah
Published on 11 Sep 2024.
RAM Ratings has assigned a final AA1/Stable rating to SEP Resources (M) Sdn Bhd’s (SEP) RM185 mil ASEAN Sustainability SRI Sukuk Wakalah (2024/2036) (SRI Sukuk). This rating aligns with the preliminary rating published on 25 July 2024 (click here).
In assigning the final rating, we reviewed the transaction documents and found the terms to be in line with our initial expectations. The final rating incorporates several updates, including a revised maturity schedule, latest available concession performance and financial position up to end-June 2024. It also considers the transaction’s revised cashflow projections reflecting reduced profit payments and revised tax calculations as confirmed by the tax adviser.
A 70%-owned subsidiary of Pesona Metro Holdings Berhad (PMHB), SEP is an investment holding company with no standalone business. Its wholly owned subsidiary, Budaya Positif Sdn Bhd, holds a 22.5-year concession for the development and maintenance of student hostels at Universiti Malaysia Perlis in Padang Siding, Perlis. Concession cashflows will be the key source of SRI Sukuk repayments.
Proceeds from the SRI Sukuk will primarily refinance SEP’s RM150 mil Islamic Medium-Term Notes (last rated AAA/Stable in August 2023) while the bulk of the remaining funds will be channelled to PMHB and its subsidiaries for sustainability-linked property development projects. PMHB also serves as the corporate guarantor for the SRI Sukuk.
Overall, we remain satisfied that SEP’s credit metrics are still commensurate with the thresholds required for an AA1-rated low-complexity private financing initiative/public-private partnership project. For further details on the assigned rating, please see SEP Resources final rating rationale.
Analytical contacts
Zachary Tan
(603) 3385 2612
zachary@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.
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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
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