MARC Ratings has affirmed its AAAIS rating on Amanat Lebuhraya Rakyat Berhad’s (ALR) RM5.5 billion Sukuk Programme with a stable outlook.
The affirmation reflects ALR’s sound credit metrics, backed by ample liquidity and strong cash flow generation from its mature and resilient toll road assets, and supported by a tight transaction structure with no dividend distributions allowed. MARC Ratings assesses ALR to have the capacity to early redeem the sukuk at its discretion on the first call date in financial year ending March 31, 2034 (FY2034). These strengths are tempered by traffic volume risk, although MARC Ratings draws comfort from the historically strong traffic profile of key highways in the portfolio.
ALR’s road network comprises Lebuhraya Damansara-Puchong (LDP), Shah Alam Expressway (KESAS), the Western Kuala Lumpur Traffic Dispersal Scheme (SPRINT) and the Stormwater Management and Road Tunnel (SMART). LDP, KESAS and SPRINT benefit from strong catchment areas and predominantly commuter traffic, which have contributed to a stable increase in system usage with limited traffic volatility. On the other hand, traffic on SMART has historically exhibited higher volatility. However, this is not expected to materially affect ALR’s financial metrics as SMART contributes to only about 3% of aggregated traffic and revenue.
Overall, performance in FY2024 was broadly in line with ALR’s base case expectations. In FY2024, toll revenue grew to RM793.1 million while volume went up to 981,400 vehicles daily. Positive trends in annual average daily traffic (AADT) and toll revenue continued in 5MFY2025, with AADT reaching around one million vehicles and annualised toll revenue tracking about 4% above FY2024’s.
Liquidity was ample with RM1.07 billion in cash and cash equivalents as at end-June 2024 while finance service coverage ratio (FSCR) stood at 4.76x as at end-FY2024. MARC Ratings’ sensitised case — which applies stress to traffic and operating expenses — forecasts a minimum FSCR of around 2.5x, comfortably above the covenanted 1.5x.