[RAM] RAM Ratings affirms AAA/Stable rating of Eternal Icon's Plaza 33-backed Senior Class ASEAN Green MTNs

RAM Ratings has affirmed the AAA/Stable rating of the Senior Class ASEAN Green Second Medium-Term Notes (Senior Class MTNs) under Eternal Icon Sdn Bhd's (Eternal Icon or the Issuer) RM400.0 mil MTN Programme, backed by Plaza 33 (the Property), an integrated office tower in Petaling Jaya.

The affirmation is premised on the transaction's superior collateral cover as reflected in the loan to value (LTV) ratio of 35.6% and stressed debt service coverage (DSCR) ratio of 2.97 times, based on RAM's assessed adjusted valuation of RM244.44 mil for Plaza 33. The sturdy collateral cover also provides a buffer against risks of deterioration in the Property's performance without affecting the rating.

In FY Dec 2023, Plaza 33's net property income (NPI) was higher y-o-y at RM19.2 mil (excluding one-off expenses for the ASEAN Green MTN) (2022: RM18.5 mil), on track to meeting our sustainable cashflow assumption of RM22.0 mil within the next two years. The Property's performance is expected to improve, underpinned by its above average property profile – as seen in a RAM Property Score of O-3.70 (maximum: O-5.00) – and management's ability to attract and retain tenants. Notably, the Property has recorded above industry-average occupancy and rental rates since its opening in 2014 amid a competitive office environment. The management is currently in talks with existing and prospective tenants to fill vacant spaces, which if successful would boost the average occupancy rate to around 88% for fiscal 2024. 

Eternal Icon is a special-purpose vehicle incorporated to undertake the securitisation of Plaza 33 – a multi-tenanted office property comprising two 14-floor towers, two levels of retail space and seven car park levels. 

 

Analytical contacts
Tan Yan Choong
(603) 3385 2502
yanchoong@ram.com.my

Lim Chern Yit
(603) 3385 2528
chernyit@ram.com.my

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