ANNOUNCEMENT DETAILS

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ANNOUNCEMENT DATE
:
10-Sep-2021
CATEGORY
:
RATING ANNOUNCEMENT
SUB-CATEGORY
:
RATING ANNOUNCEMENT
TITLE
:
Indera Persada Sdn Bhd
ISSUER NAME
:
GOVERNMENT OF MALAYSIA, INDERA PERSADA SDN BHD
DESCRIPTION
:
-
CONTENT
:
RAM Ratings has reaffirmed the AA1/Stable rating of Indera Persada Sdn Bhd's (the Company) RM280 mil Fixed Rate Serial Bonds (2013/2028) (the Bonds). 

The reaffirmation is premised on the Company's strong debt servicing ability, backed by the steady inflow of monthly Availability Charges (ACs) which it is entitled to receive following the completion of a training centre for the Public Works Department (PWD), known as the Centre of Excellence in Engineering and Technology (CREaTE or the Project). ACs are the sole source of repayment for the Bonds. Indera Persada has inked an 18-year Concession Agreement (CA) with the PWD, expiring in September 2031, which includes a three-year construction period.

The Company recorded a debt service coverage ratio (with cash, post distribution, calculated over a 12-month period in payment months, DSCR) of 2.42 times in FY Sept 2020, outperforming RAM's projection of 2.14 times. The DSCR ratio surpassed the minimum 1.5 times required for a non-complex public private partnership/private finance initiative AA1-rated transaction. This was because of stronger cash reserves following the timely receipt of ACs and advances from the Company's ultimate shareholder, Digistar Corporation Berhad. 

Receipts from the Government of Malaysia (GoM) were timely and within our expectations. ACs were received within respective averages of 41 days and 40 days from the date of invoice for 2020 and 6M 2021. Maintenance service charges (MSCs), which the Company is paid for the Project's maintenance, were received within respective averages of 53 days and 52 days for the same periods. Counterparty risk is deemed low as the ultimate obligor of monthly concession payments is the GoM, via the PWD. 

In RAM's stressed analysis, Indera Persada's minimum and average DSCRs are projected to come in at 1.52 times and 1.87 times while distributions to shareholders will amount to RM24.6 mil throughout the remaining tenure of the Bonds (base case: 1.84 times?
ATTACHMENT
:
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SOURCE
:
BURSA
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