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RAM Ratings affirms UniTapah
Published on 14 May 2025.
RAM Ratings has affirmed the AAA/Stable rating of UniTapah Sdn Bhd’s (Unitapah or the Company) Sukuk Murabahah of up to RM600 mil (2014/2035) (the Sukuk).
The rating is anchored on the Company’s steady cashflow and robust debt coverage metrics. Under a 23-year concession which expires in January 2034, Unitapah receives predictable and prompt monthly payments from Universiti Teknologi MARA (UiTM) for developing and maintaining its campus in Tapah, Perak.
UniTapah’s maintenance performance was excellent in 2024, with no penalties incurred. Maintenance is undertaken externally through Everfine FMS Sdn Bhd, a subsidiary of facility management service provider GFM Services Berhad.
In line with the strong operational performance, the Company’s finance service coverage ratio (FSCR, with cash balances) was 2.16 times in December 2024, exceeding RAM’s stressed projections. Our stressed assumptions indicate that FSCRs will remain strong at above 1.80 times throughout the sukuk tenure, comfortably surpassing levels required for the sukuk rating.
Sukukholders’ interests are safeguarded by the transaction’s restrictive financing terms and covenants imposed, including limitations on additional debt and a complete prohibition of distributions. As a result, the transaction benefits from all cash surpluses generated, with any cashflow outperformance relative to our stressed analysis leading to an improved debt coverage profile. Counterparty risk is deemed low as the Government of Malaysia, via UiTM, is the ultimate obligor of concession payments.
As with other concession-based transactions, UniTapah is exposed to concession termination risk. While the compensation mechanism is spelt out, risk arises from potential delays in the receipt of reimbursements. Termination is viewed as remote, considering the Company’s track record and the non-complex nature of the maintenance work.
Analytical contacts
Neo Xue Wei, CFA
(603) 2708 8241
xuewei@ram.com.my
Davinder Kaur Gill
(603) 2708 8220
davinder@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
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 2025 by RAM Rating Services Berhad
