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

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

This transaction monetises outstanding receivables due under the Share Purchase Agreement (SPA) between Syarikat Pengeluar Air Selangor Holdings Berhad (SPLASH Holdings or the Originator) and Pengurusan Air Selangor Sdn Bhd (Air Selangor or the Obligor). The SPA governs Air Selangor’s acquisition of SPLASH Holdings’ entire stake in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH).

A special-purpose funding entity, Swirl Assets relies solely on fixed annual instalments payable by Air Selangor under the SPA (Annual Instalments) to meet its obligations under the Senior Notes. 

The affirmation of the Senior Notes rating reflects Air Selangor’s creditworthiness in its role as the Obligor (click here for more information). As Malaysia’s largest water operator, Air Selangor holds the exclusive licence for water treatment and distribution in Selangor, Kuala Lumpur and Putrajaya. Its critical role in delivering essential services underlines our expectation of strong state support, particularly in challenging financial conditions. In our view, Air Selangor’s credit strength is closely aligned with the financial standing of the state of Selangor, which has a robust State Implicit Strength (SIS) – the highest classification in RAM’s SIS Framework.

To date, Swirl Assets has received Annual Instalments on schedule. As of end-June 2024, RM118.40 million in cash held in the Settlement Account, together with RM326.81 million in future instalments due, were more than adequate to cover all remaining coupon and principal payments on the Senior Notes. The designated accounts report as at the same date confirmed that actual transaction expenses were largely in line with projections.

Funds in the Settlement Account cannot be used to make payments in respect of the Junior Notes until all Senior Notes have been fully redeemed, mitigating any potential cashflow leakage. The transaction ensures that designated accounts are prefunded with issue proceeds to cover any transaction expenses throughout the tenure of the Senior Notes as well as early redemption premiums, if applicable.


Analytical contacts
Darrel Tiang
(603) 3385 2531
darrel@ram.com.my

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

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