Thursday, June 30, 2011

RAM Ratings withdraws rating on SPLASH's RM1.4b debt notes

KUALA LUMPUR: RAM Rating Services Bhd has withdrawn the rating of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd's (SPLASH) RM1.407 billion debt notes.

The ratings agency said on Thursday, June 30 it would no longer maintain a rating surveillance on the Al-Bai Bithaman Ajil debt securities issuance facility (BaIDS).

'This follows the company's request for the withdrawal of its debt rating,' said RAM Ratings, which said that prior to the rating withdrawal, the BaIDS had carried a BBB3 rating, which had been on negative Rating Watch.

It said the negative Rating Watch reflected SPLASH's strained liquidity profile arising from poor collections from its sole counterparty, Syarikat Bekalan Air Selangor Sdn Bhd, amid the protracted restructuring of Selangor's water industry.

'RAM Ratings highlights that if the debt facility had remained under surveillance, the rating would have been subjected to further downward pressure,' it said.

The rating agency also said the management of both Destinasi Teguh Sdn Bhd and Sungai Harmoni Sdn Bhd had requested that the ratings of their proposed bond issues be kept private.

Due to the request, RAM Ratings will no longer provide rating updates on the proposed bond issues of Destinasi Teguh and Sungai Harmoni.

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