Posted Date: September 21, 2021
MARC has affirmed its AAAIS rating on Putrajaya Bina Sdn Bhd’s (PBSB) RM1.58 billion Islamic Medium-Term Notes (Sukuk Wakalah) Programme. The rating outlook is stable.
The affirmed rating is mainly driven by the credit strength of the payment stream from the Malaysian government in the form of availability charges (AC), the quantum of which is sufficient to meet the financial obligations under the rated programme. The rating is also supported by PBSB’s status as a wholly-owned subsidiary of Putrajaya Holdings Sdn Bhd (PJH, rated AAA/Stable).
PBSB receives AC payments totalling RM215.6 million p.a. under a 25-year asset management phase that commenced in December 2019. It had completed the development of nine blocks of government office buildings and one block of shared facilities in Parcel F, Precinct 1 in Putrajaya in April 2019. The company receives maintenance charges (MC) of RM69.2 million p.a. subject to meeting specified key performance indicators (KPI).
PBSB is required to maintain funds equivalent to its principal and profit repayment, one month ahead of its due date at all times, as well as to maintain a minimum Financial Service Cover Ratio (FSCR) of 1.50x following any dividend payment. Under the rating case, the company would achieve an average FSCR of 4.37x throughout the tenure of the outstanding sukuk. In the unlikely event of non-receipt of MC payments during the tenure of the rated programme, MARC’s sensitivity analysis shows that the FSCR will range between 2.09x and 7.82x. Given the low complexity of work involved in buildings maintenance and the proven track record of the facilities management companies contracted to undertake the maintenance, the risk of not meeting the set KPIs is deemed low.