[RAM] RAM Ratings assigns final AA3/Stable rating to Tranche 2 IMTN, sponsored by Exsim Development

RAM Ratings has assigned a final rating of AA3/Stable to the RM323 mil second issuance (Tranche 2 IMTN) under Exsim Capital Resources Berhad’s (Exsim Capital or the Issuer) RM2 bil Sukuk Musharakah Programme (IMTN Programme). The IMTN Programme allows for the monetisation of progress billings by Exsim Development Sdn Bhd or its subsidiaries (Exsim or the Group), where the Group will from time to time sell to the Issuer its beneficial interest under respective sale and purchase agreements (SPAs) signed with buyers related to specific property development projects. Future receipts under such agreements will be used to fund remaining construction costs of the identified projects, as well as to meet the Issuer’s fees, expenses and obligations in respect of each sukuk issuance. 

Concurrently, Exsim Capital will also establish an unrated RM80 mil Sukuk Murabahah ICP (Tranche 2 ICP) facility under its RM1 bil Sukuk Murabahah ICP Programme. The Tranche 2 ICP will act as a contingent line for the transaction. Exsim Capital is a subsidiary and special-purpose vehicle of Exsim. 

Having reviewed the transaction documents for the IMTN Programme and the ICP Programme, we are satisfied that they reflect the intended transaction structure represented during the preliminary rating exercise. The final rating is also reflective of the latest construction progress, projects cashflow and sales progress as at end-May 2021. We have further taken into consideration the independent project certifier’s (IPC) view on the development projects based on the latest construction progress report, as well as the relevant legal and tax opinions. Overall, we find these to be in order and largely in line with our earlier assessment of the Tranche 2 IMTN announced on 28 April 2021. Refer to our final rating rationale for further details on the assigned rating.

Upon closing, RAM will maintain surveillance of the transaction via monthly construction progress reports, project account statements, trustee reports and quarterly IPC reports to track the actual time and cost to completion against the developer’s targets. We expect to make an announcement on the progress of the projects semi-annually or as and when required. 

Analytical contacts
Liew Kar Ling
(603) 3385 2586

Lim Chern Yit
(603) 3385 2528