KUALA LUMPUR: RAM Rating Services Bhd expects Syarikat Prasarana Negara Bhd's gearing level to climb up to about four to five times when it issues the remaining RM2 billion bonds over the next three years for the light rail transit (LRT) extension plan.
The ratings agency said on Friday, April 13 that over the next three years, Prasarana was expected to issue the remaining RM2 billion of its unrated RM4 billion government-guaranteed sukuk to fund the LRT extension plan.
'Following this, its gearing level is expected to climb up to about 4.0 to 5.0 times,' it said.
RAM Ratings reaffirmed the AAA ratings of Prasarana's RM1.0 billion nominal value redeemable guaranteed coupon-bearing bonds (2002/2022) and RM5.468 billion nominal value redeemable guaranteed serial fixed-rate bonds (2003/2016); the long-term ratings have a stable outlook.
'The ratings reflect the strategic importance of Prasarana's role in the Government of Malaysia's (GoM) provision of public transportation services.
'As such, RAM Ratings opines that Prasarana is able to receive continued financial support from the GoM, which has been extending government grants for the Group's operating and financing costs. This is further strengthened by the GoM's irrevocable and unconditional guarantee on the bonds,' it said.
Prasarana was set up as part of the government's initiative to restructure the public transportation systems in the Klang Valley and Penang.
The group owns and operates ' via its subsidiaries ' the major modes of public transport in these two cities, including the Klang Valley Light Rail Transit (LRT) systems, the KL Monorail and the bus fleets servicing the Klang Valley and Penang.
The group will also own and operate the upcoming Mass Rapid Transit (MRT) system in the Klang Valley.
'We note that Prasarana's debt burden had eased slightly to RM9.60 billion as at end-December 2010, albeit still hefty (end-December 2009: RM9.62 billion).
'Because of weaker retained earnings, however, the group's gearing ratio worsened from 2.99 times to 3.32 times,' it said.
RAM Ratings also said the estimated RM50 billion MRT project could be substantially debt-funded.
RAM Ratings' head of consumer and industrial ratings Kevin Lim said 'there is considerable scope for its gearing level to rise should Prasarana or its subsidiaries be chosen as the financing vehicle for the MRT project'.
Nevertheless, he believed the group would continue deriving strong financial flexibility from the government.
The ratings agency said on Friday, April 13 that over the next three years, Prasarana was expected to issue the remaining RM2 billion of its unrated RM4 billion government-guaranteed sukuk to fund the LRT extension plan.
'Following this, its gearing level is expected to climb up to about 4.0 to 5.0 times,' it said.
RAM Ratings reaffirmed the AAA ratings of Prasarana's RM1.0 billion nominal value redeemable guaranteed coupon-bearing bonds (2002/2022) and RM5.468 billion nominal value redeemable guaranteed serial fixed-rate bonds (2003/2016); the long-term ratings have a stable outlook.
'The ratings reflect the strategic importance of Prasarana's role in the Government of Malaysia's (GoM) provision of public transportation services.
'As such, RAM Ratings opines that Prasarana is able to receive continued financial support from the GoM, which has been extending government grants for the Group's operating and financing costs. This is further strengthened by the GoM's irrevocable and unconditional guarantee on the bonds,' it said.
Prasarana was set up as part of the government's initiative to restructure the public transportation systems in the Klang Valley and Penang.
The group owns and operates ' via its subsidiaries ' the major modes of public transport in these two cities, including the Klang Valley Light Rail Transit (LRT) systems, the KL Monorail and the bus fleets servicing the Klang Valley and Penang.
The group will also own and operate the upcoming Mass Rapid Transit (MRT) system in the Klang Valley.
'We note that Prasarana's debt burden had eased slightly to RM9.60 billion as at end-December 2010, albeit still hefty (end-December 2009: RM9.62 billion).
'Because of weaker retained earnings, however, the group's gearing ratio worsened from 2.99 times to 3.32 times,' it said.
RAM Ratings also said the estimated RM50 billion MRT project could be substantially debt-funded.
RAM Ratings' head of consumer and industrial ratings Kevin Lim said 'there is considerable scope for its gearing level to rise should Prasarana or its subsidiaries be chosen as the financing vehicle for the MRT project'.
Nevertheless, he believed the group would continue deriving strong financial flexibility from the government.
No comments:
Post a Comment