Friday December 21, 2012
TTPC Islamic debt gets preliminary AA1 rating
PETALING JAYA: Independent power producer Teknologi Tenaga Perlis Consortium Sdn Bhd’s (TTPC) proposed sukuk murabahah of up to RM835mil in nominal value (2012/2023) has been assigned a preliminary AA1 long-term rating with a stable outlook.
TTPC owns and operates a 650-MW combined-cycle, gas-turbine power plant in Kuala Sungai Baru, Perlis under a power purchase agreement (PPA) with Tenaga Nasional Bhd (TNB) in which the former would sell generating capacity and electrical energy to the latter for 21 years from March 31, 2003 to March 31, 2024.
The rating agency said the preliminary rating reflects TTPC’s robust debt-servicing aptitude with healthy liquidity position, underpinned by a relatively stable cash-generating ability.
The proposed sukuk murabahah would be largely utilised to refinance the company’s existing RM1.51bil Al-Istisna’ fixed-rate serial bonds (2001/2016), of which RM645mil remains outstanding as at end-September.
It added that based on sensitised cashflow projections, the company’s minimum finance service coverage ratio (with cash balances, post-distribution and measured over a 12-month period on semi-annual principal repayment dates) is expected to come up to 1.80 times, which commensurates with an AA1 rating.
It said the proposed sukuk also has a more stringent finance service coverage ratio versus the 1.4 times of the Al-Istisna’ bonds, made possible because the sukuk has been stretched throughout the remaining tenure of the PPA and amply covered by remaining cashflow.
“The preliminary rating is also supported by TTPC’s strong business profile, underscored by its favourable PPA terms. We derive further comfort from the sturdy credit profile of TNB, whose debt facility carries an AAA long-term rating, with a stable outlook,” it said.