MARC Ratings has affirmed its AAIS rating on Berapit Mobility Sdn Bhd’s (BMSB) RM1.5 billion Sustainability Islamic Medium-Term Notes (IMTN) Programme with a stable outlook.
BMSB is a special-purpose vehicle established by parent SMH Rail Sdn Bhd to undertake sale-and-leaseback transactions with government statutory body Railway Assets Corporation (RAC). Proceeds from the sukuk issuance were used to partially finance the deals involving the acquisition and subsequent refurbishment or replacement of 44 locomotives and 246 wagons, sourced from and intended for use by RAC.
The rating reflects the strong visibility of cash flows, supported by long-term lease agreements with tenures of 25 years, contracted with a creditworthy counterparty. Additional credit support is derived from structural protections, including the ring-fencing of lease payments into designated accounts, as well as the operational expertise of SMH Rail, which has a track record of over 20 years in rolling stock maintenance, repair, and overhaul services. These credit strengths are tempered by risks associated with potential contract termination, execution challenges, and delays in lease payment.
The delivery schedule for the rolling stock has been revised due to external factors, including supply chain challenges. However, no penalties have been imposed on BMSB as a result of the schedule revisions. While the revision is expected to reduce revenue, the impact is offset by interest savings and lower projected dividend distributions over the sukuk tenure. Consequently, the cash flow coverage metrics remain unaffected.
Under MARC Ratings’ sensitised scenario — which assumes a minimum of 24 days of monthly lease payments and a six-month collection period, along with a one-month project delay — the finance service coverage ratio (FSCR) is projected to remain above 1.50x throughout the sukuk period. This is further supported by the parent company’s undertaking to ensure that BMSB maintains a minimum FSCR of 1.5x over the sukuk’s tenure.