KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the AAA rating of Danga Capital Bhd's'' RM10 billion multi-currency Islamic securities programme while the long-term rating has a stable outlook.
The ratings agency said on Monday, Oct 10 the rating reflected Khazanah Nasional Bhd's credit strength as the purchase undertaking obligor in this transaction.
RAM Ratings said the proceeds from the programme would be use to buy pools of identified Shariah-approved shares and/or assets from Khazanah.
Under the exercise, the company would top up any shortfall in the income generated by the Musyarakah venture; it has also undertaken to purchase the specific portfolio units from Danga at a pre-agreed price upon maturity or a dissolution event.
'Khazanah's credit profile hinges on its strategic position as the investing fund of the Malaysian Government. This accords it superior financial flexibility in terms of access to the capital markets, supported by the quality of its diversified portfolio,' said RAM Ratings' head of structured finance Ratings Siew Suet Ming.
'Given the company's strategic role, RAM Ratings believes that the likelihood of an extraordinary support from the Malaysian Government, if required, is very high,' it said.
RAM Ratings said Khazanah's debt-servicing aptitude is primarily supported by dividend receipts, equity divestments and, to a smaller extent, its refinancing ability.
It pointed out Khazanah's top line rebounded to RM5 billion in fiscal 2010 (up 45.6%), supported by more robust dividend income and divestment gains.
However, it noted the profit performance was affected by RM2.1 billion of impairment losses, which suppressed its return on capital employed to 3.2% (fiscal 2009: 3.8%).
'Looking ahead, we expect Khazanah's short-term financial performance to be subdued, given the uncertain global financial and economic landscapes,' it said.
The ratings agency said on Monday, Oct 10 the rating reflected Khazanah Nasional Bhd's credit strength as the purchase undertaking obligor in this transaction.
RAM Ratings said the proceeds from the programme would be use to buy pools of identified Shariah-approved shares and/or assets from Khazanah.
Under the exercise, the company would top up any shortfall in the income generated by the Musyarakah venture; it has also undertaken to purchase the specific portfolio units from Danga at a pre-agreed price upon maturity or a dissolution event.
'Khazanah's credit profile hinges on its strategic position as the investing fund of the Malaysian Government. This accords it superior financial flexibility in terms of access to the capital markets, supported by the quality of its diversified portfolio,' said RAM Ratings' head of structured finance Ratings Siew Suet Ming.
'Given the company's strategic role, RAM Ratings believes that the likelihood of an extraordinary support from the Malaysian Government, if required, is very high,' it said.
RAM Ratings said Khazanah's debt-servicing aptitude is primarily supported by dividend receipts, equity divestments and, to a smaller extent, its refinancing ability.
It pointed out Khazanah's top line rebounded to RM5 billion in fiscal 2010 (up 45.6%), supported by more robust dividend income and divestment gains.
However, it noted the profit performance was affected by RM2.1 billion of impairment losses, which suppressed its return on capital employed to 3.2% (fiscal 2009: 3.8%).
'Looking ahead, we expect Khazanah's short-term financial performance to be subdued, given the uncertain global financial and economic landscapes,' it said.
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