[RAM] RAM Ratings assigns final AAA/Stable rating to Swirl Assets

RAM Ratings has assigned a final rating of AAA/Stable to the proposed RM595 mil Senior Notes to be issued under Swirl Assets Berhad’s (Swirl Assets or the Issuer) RM700 mil Asset-backed Medium-term Notes Facility (2020/2028) (the MTN Facility). The proposed issuance involves eight tranches of Senior Notes, with yearly repayments, which rank above the RM28.90 mil unrated tranche of Junior Notes (collectively, the Notes). 

The MTN Facility was set up by Syarikat Pengeluar Air Selangor Holdings Berhad (SPLASH Holdings or the Originator) to monetise the balance of receivables due from Pengurusan Air Selangor Sdn Bhd (Air Selangor or the Obligor) under the Share Purchase Agreement1 (SPA). Dated 28 September 2018, the SPA relates to the purchase of SPLASH Holdings’ entire stake in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) by Air Selangor for RM2.55 bil. Air Selangor’s acquisition of SPLASH forms a key part of the long-drawn-out resolution of the state of Selangor’s water restructuring exercise. Given that Swirl Assets’ only source of cashflow is the Obligor’s Annual Instalments under the SPA, the assigned rating reflects Air Selangor’s credit profile which in turn mirrors that of the Selangor State Government.

In assigning the final rating, we have reviewed all relevant transaction documents as well as assumptions applied in the transaction’s cashflow model. We find these to be in line with our expectations when we assigned the preliminary rating on 15 July 2020. The Senior Notes will be backed by a balance of eight yearly instalments from the Obligor totalling RM577.78 mil, with interest charges of 5.25% per annum (Annual Instalments), to be sold to the Issuer by way of absolute legal assignment.

RAM will monitor the transaction’s performance on a regular basis via semi-annual reports on designated account balances, including details on amounts held in permitted investments. We will keep the rating under surveillance as long as the Senior Notes remain outstanding.

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1 As amended and supplemented by the Supplemental Share Purchase Agreement dated 18 May 2020.


Analytical contacts
Tan Han Nee
(603) 3385 2529
hannee@ram.com.my

Chong Van Nee
(603) 3385 2482
vannee@ram.com.my

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Padthma Subbiah
(603) 3385 2577
padthma@ram.com.my