[RAM] RAM Ratings assigns preliminary AA3/Stable rating to Exsim Capital's Tranche 7 IMTN

RAM Ratings has assigned a preliminary rating of AA₃/Stable to the proposed ASEAN Sustainability SRI Sukuk of up to RM475 mil (Tranche 7 IMTN) under Exsim Capital Resources Berhad’s (Issuer) RM2 bil Sukuk Musharakah Programme. The Issuer is a special-purpose financing vehicle wholly owned by Exsim Development Sdn Bhd (Exsim).

The Tranche 7 IMTN will be backed by future receivables under the sale and purchase agreement (SPA) for two service residences projects - The Kingswoodz in Bukit Jalil and Noordinz Suites in George Town (collectively, the Projects). Future receipts will fund the Projects’ remaining construction costs and cover all fees, expenses and obligations under the Tranche 7 IMTN and the accompanying RM110 mil unrated Sukuk Murabahah ICP (Tranche 7 ICP). The Tranche 7 ICP, which will be fully underwritten by a financial institution rated AAA/Stable/P1 by RAM, will serve as a liquidity line for cost overruns, working capital gaps and any shortfalls in IMTN profit payments and senior expenses.

RAM’s cash flow assessment for the Tranche 7 IMTN incorporates a 99% take-up rate for the Projects (a condition precedent for issuance), along with assumptions on buyer defaults and potential property price declines post-default, in line with the assigned rating. A higher default frequency was applied for Noordinz, reflecting its more investor-driven buyer profile (mainly for Airbnb) versus Kingswoodz which is expected to be owner-occupied. Buyer default risk is largely mitigated by the substantial proportion of sold units that are end-financed by banks. While construction risks are partly moderated by fixed-price lump-sum contracts and a completion undertaking from Exsim, our cash flow simulation included construction cost overruns and delays in progress payments based on the respective projects’ construction stage, design complexity and site-specific logistical challenges. 

The liquidity support and projected net development profit of RM621.6 mil from the Projects is adequate to meet financial obligations up to the legal maturity date under stress scenarios commensurate with a AA3 rating. Assuming issuance of Tranche 7 MTN in June 2025, a comfortable time buffer of about 16.5 months for Kingswoodz and 10 months for Noordinz between legal Certificate of Practical Completion (CPC) dates and legal Certificate of Completion and Compliance (CCC) dates are available to absorb potential delays. Should a trigger event occur, the Security Trustee may step in with assistance from the project management company (PMC) to manage the Projects.

The assignment of the final rating will be subject to RAM’s satisfactory review of the transaction documents, independent project certifier report and relevant legal and tax considerations. Any material change in take-up rate, buyer profile, construction progress, underwriting terms or principal transaction conditions may result in a change in the rating. 


Analytical contacts
L Nurisya Abdullah
(603) 2708 8238
nurisya@ram.com.my

Lim Chern Yit
(603) 2708 8302
chernyit@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my