RAM Ratings has assigned a preliminary rating of AAA/Stable to the proposed RM630* mil Senior Notes to be issued under Glacier Assets Berhad's (Glacier Assets or the Issuer) RM800 mil Asset-backed Medium-Term Notes facility (the MTN Facility). The proposed issuance involves eight tranches of Senior Notes with yearly repayments and rank above an unrated tranche of Junior Notes. The Senior Notes will be backed by receivables due from Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH or the Obligor).
Glacier Assets was set up by Gamuda Water Sdn Bhd (Gamuda Water or the Originator) to monetise the balance of receivables due under the Termination and Settlement Agreement (TSA) between Pengurusan Air Selangor Sdn Bhd (Air Selangor), SPLASH and Gamuda Water. Forming a key part of the resolution of long drawn-out negotiations on Selangor's water restructuring exercise, the TSA relates to the settlement of receivables due from SPLASH to Gamuda Water for the supply of treated water and operations and maintenance (O&M) works performed. Although the primary payment obligation lies with SPLASH, Air Selangor its parent company will pay Gamuda Water any missed instalments within a predefined period of the scheduled due dates.
Under the TSA, the aggregated fees and charges payable are split into two amounts a Settlement Sum of RM762.45 mil and a Cut-Over Sum of RM7.58 mil. The balances of the Settlement Sum and Cut-Over Sum, excluding the upfront payment of the Settlement Sum (RM76.24 mil) and partial payment of the Cut-Over Sum (RM 3.07 mil), are payable in nine yearly instalments commencing from 26 September 2020, the first of which was paid on the actual date of payment made.
The unpaid balances of the Settlement Sum and Cut-Over Sum together with interest charges of 5.25% per annum earned on the unpaid amount, with a combined value of RM759.01 mil and payable in eight annual instalments (Annual Instalments), will be sold to the Issuer as a ''true sale'' by