Published: Wednesday June 13, 2012 MYT 6:31:00 PM
UEM Group to issue RM2.2b 30-yr Sukuk
KUALA LUMPUR: UEM Group Bhd has proposed a 30-year Islamic medium-term notes (MTN) programme of up to RM2.2bil.
RAM Rating Services Bhd had on Wednesday assigned a long-term rating of AA2 to the Sukuk, which would be issued by United Growth Bhd - which is a unit of UEM Group. The long-term rating has a stable outlook.
The ratings agency said through an irrevocable and unconditional purchase undertaking between United Growth and UEM, the latter would buy the portfolio units from United Growth at a price equal to the exercise price.
"Given the strong credit link between them, the assigned rating reflects UEM's credit risk," it said.
RAM Ratings said UEM's credit profile was supported by its favourable corporate lineage, as a unit of Khazanah Nasional Bhd.
RAM Ratings head of real estate and construction ratings, Thong Mun Wai said UEM was important to the government due to its stakes in strategic toll roads and vast land bank in Nusajaya - part of Iskandar Malaysia.
"It has a very strong relationship with the government, considering its full ownership and board participation by Khazanah, as well as indirect assistance from Khazanah," he adds.
Hence, he expected a moderately high likelihood of extraordinary support from the government.