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Friday March 29, 2013

MARC reaffirms TTM sukuk rating


PETALING JAYA: TTM Sukuk Bhd’s RM600mil Sukuk Murabahah has been affirmed AAAIS with a stable outlook by Malaysian Rating Corporation Bhd (MARC).

TTM is a funding vehicle of Trans Thai-Malaysia (Thailand) Ltd (TTMT), a 50:50 joint venture between Petroliam Nasional Bhd and Thailand’s PTT Pcl.

In a statement, MARC said the sukuk was issued to fund the construction of two gas pipelines to transport natural gas from the joint development area to Rayong, Thailand under the second phase of the Trans Thai-Malaysia gas pipeline and separation project.

“The affirmed rating considers the strategic importance of the project to its sponsors as critical pipeline infrastructure for the Trans Thai-Malaysia gas pipeline and separation project, and the relatively predictable nature of cash flows generated under the project’s long-term services agreement which ends in 2045,” it said.

It said the project’s revenue structure, in particular its availability-based capacity revenue, the sustained high pipeline utilisation rates by sole offtaker PTT and the operational reliability of the pipelines continue to support the project’s financial performance and compliance with its financial covenants.

“The rating also takes into account the credit strength of project offtaker PTT and the overall sound credit metrics of TTMT in light of credit linkages arising from cross-acceleration and cross-default provisions between the sukuk and the syndicated bank loan taken to finance the first phase of the gas pipeline and separation project,” it said.

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