KUALA LUMPUR: RAM Rating Services Bhd reaffirmed the AA3 rating of Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sdn Bhd's RM247 million Islamic debt notes.
The rating agency said on Monday, May 16 the outlook on the rating of the secured Bai' Bithaman Ajil Islamic debt securities (BaIDS)cwas also revised from positive to stable.
KLBK is the toll concessionaire for the 17-km Butterworth-Kulim Expressway (BKE).
'The revision of the rating outlook is based on the fluidity of the ongoing negotiations between PLUS EXPRESSWAYS BHD [] and the government, with regard to the concession agreement(s) that will supplement/replace all the existing ones governing the four domestic tolled roads under the PLUS group, including the BKE.
'RAM Ratings opines that the uncertainty arising from the ongoing discussions and the possibility of protracted negotiations preclude any upward rating action in the near term,' it said.
The BaIDS rating remains supported by the BKE's healthy and proven track record on traffic volume as well as its robust debt-servicing ability, along with the expectation that these will stay commendable.
RAM Ratings said in 2010, the BKE achieved its best growth rate in average daily traffic for the past decade.
On average, 62,704 vehicles plied the BKE daily last year, translating into a robust 8.90% year-on-year improvement (2009: +4.30%).
Penang's resuscitated economy, heightened economic activity within the Kulim Hi-Tech Park and the progressive development of residential areas along the BKE had contributed to the commendable performance.
'Going forward, the BKE is envisaged to exhibit healthy single-digit traffic growth, supported by the aforementioned factors.
'We note that KLBK's debt-protection measures remain intact, with strong finance service cover ratios (FSCRs) of 1.63 times (without cash balances) and 5.26 times (with cash balances, post-distribution) as at end-2010. Looking ahead, the company is expected to register a minimum FSCR of 2.50 times (with cash balances, post-distribution) on principal repayment dates,' it said.
The rating agency said on Monday, May 16 the outlook on the rating of the secured Bai' Bithaman Ajil Islamic debt securities (BaIDS)cwas also revised from positive to stable.
KLBK is the toll concessionaire for the 17-km Butterworth-Kulim Expressway (BKE).
'The revision of the rating outlook is based on the fluidity of the ongoing negotiations between PLUS EXPRESSWAYS BHD [] and the government, with regard to the concession agreement(s) that will supplement/replace all the existing ones governing the four domestic tolled roads under the PLUS group, including the BKE.
'RAM Ratings opines that the uncertainty arising from the ongoing discussions and the possibility of protracted negotiations preclude any upward rating action in the near term,' it said.
The BaIDS rating remains supported by the BKE's healthy and proven track record on traffic volume as well as its robust debt-servicing ability, along with the expectation that these will stay commendable.
RAM Ratings said in 2010, the BKE achieved its best growth rate in average daily traffic for the past decade.
On average, 62,704 vehicles plied the BKE daily last year, translating into a robust 8.90% year-on-year improvement (2009: +4.30%).
Penang's resuscitated economy, heightened economic activity within the Kulim Hi-Tech Park and the progressive development of residential areas along the BKE had contributed to the commendable performance.
'Going forward, the BKE is envisaged to exhibit healthy single-digit traffic growth, supported by the aforementioned factors.
'We note that KLBK's debt-protection measures remain intact, with strong finance service cover ratios (FSCRs) of 1.63 times (without cash balances) and 5.26 times (with cash balances, post-distribution) as at end-2010. Looking ahead, the company is expected to register a minimum FSCR of 2.50 times (with cash balances, post-distribution) on principal repayment dates,' it said.
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