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RAM Ratings affirms rating of Starbright Capital’s water receivables-backed notes
Published on 14 Oct 2025.
RAM Ratings has affirmed the AAA/Stable rating of the RM665 million Medium-Term Notes (MTN) issued under Starbright Capital Berhad’s (Starbright or the Issuer) RM700 million Asset-Backed Medium-Term Notes Facility.
The transaction monetises the remaining receivables due under the Termination and Settlement Agreement (TSA) between Pengurusan Air Selangor Sdn Bhd (Air Selangor or the Guarantor), Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH or the Obligor) and Sungai Harmoni Sdn Bhd (the Originator). The receivables represent amounts due from SPLASH to Sungai Harmoni for the operations and maintenance of Phase 1 of the Sungai Selangor Water Treatment Plant.
Established as a special-purpose funding vehicle, Starbright relies exclusively on fixed annual instalments payable by SPLASH under the TSA (Annual Instalments) to service the MTN. In the event of missed payments, the Issuer has recourse to Air Selangor – SPLASH’s parent company – which has committed to cover missed Annual Instalments and default interest, as necessary, upon written demand.
The affirmation of the MTN rating is driven by Air Selangor’s credit strength (click here for more information) in its role as Guarantor for the Annual Instalments payable under the TSA. As Malaysia’s largest water utility company and the sole licence holder for water treatment and distribution in Selangor, Kuala Lumpur and Putrajaya, Air Selangor fulfils a vital public service role for the state. Our assessment indicates ‘almost certain’ state government support for Air Selangor in times of financial difficulty, closely aligning the Guarantor’s credit strength with the financial resilience of the state of Selangor. Selangor’s State Implicit Strength (SIS) is assessed to be ‘superior’, the highest category in RAM’s SIS Framework.
To date, Starbright has received all scheduled Annual Instalments on time. As of end-May 2025, RM1.72 mil in cash was held in the transaction’s Settlement Account. This along with the remaining RM326.02 mil of receivables due is more than sufficient to meet all coupon and principal payments on the outstanding RM290.0 mil of MTN. The designated accounts report as at the same date indicates that actual transaction expenses stayed in line with previous estimates.
Once all transaction obligations have been met, the transaction terms allow the Issuer to use any residual balance in the Settlement Account to pay down the outstanding deferred purchase price of the receivables on each anniversary of the issue date.
Analytical contacts
Darrel Tiang
(603) 2708 8219
darrel@ram.com.my
Tan Han Nee
(603) 2708 8322
hannee@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
