[RAM] RAM Ratings affirms rating of Swirl Assets' Senior Notes backed by receivables due from Air Selangor

RAM Ratings has affirmed the AAA/Stable rating of the RM595 mil Senior Notes under Swirl Assets Berhad’s (the Issuer) RM700 mil Asset-Backed Medium-Term Notes Facility. 

The transaction monetises the balance of receivables due under the Share Purchase Agreement (SPA) between Syarikat Pengeluar Air Selangor Holdings Bhd (SPLASH Holdings or the Originator) and Pengurusan Air Selangor Sdn Bhd (Air Selangor or the Obligor). The SPA formalises the Obligor’s purchase of the Originator’s entire stake in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH). Established as a sole-purpose funding vehicle, Swirl Assets’ cashflow receipts stem solely from scheduled and fixed annual instalments payable by Air Selangor under the SPA (Annual Instalments).

The rating affirmation reflects the credit profile of Air Selangor (click here for more information) in its role as the Obligor for the Annual Instalments. The largest water operator in Malaysia, Air Selangor is the sole licence holder for water treatment and distribution services in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. It plays a critical public policy role for the Selangor state government. The highly anticipated support from the state government in times of financial distress underpins our view that the Obligor’s credit strength mirrors that of the state. Selangor’s State Implicit Strength (SIS) is assessed to be robust, the highest ranking in RAM’s SIS Framework. 

Swirl Assets’ receipt of Annual Instalments has been timely to date. As at end-June 2023, RM116.11 mil of cash in the transaction’s Settlement Account and the remaining RM417.99 mil of Annual Instalments to be received are more than sufficient to cover coupon and principal obligations under the outstanding Senior Notes. Based on the designated accounts report as at the same date, actual transaction expenses incurred were largely in line with the levels estimated.

The transaction prohibits coupon and principal payment under the unrated Junior Notes until all Senior Notes have been fully redeemed. Designated accounts are prefunded with cash upfront via issue proceeds to cover the Issuer’s transaction expenses during the tenure of the Senior Notes and early redemption premiums on the notes, if any.


Analytical contacts
Liew Kar Ling
(603) 3385 2586
karling@ram.com.my

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

Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my