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Press Release
04 Jan | Thursday
RAM Ratings reaffirms AA1/Stable rating of Teknologi Tenaga Perlis Consortium’s sukuk

RAM Ratings has reaffirmed the AA1/Stable rating of Teknologi Tenaga Perlis Consortium Sdn Bhd’s (TTPC or the Company) RM835 million Sukuk Murabahah (2013/2023). The rating reflects the Company’s sturdy business profile, which is underscored by the favourable terms of its power purchase agreement (PPA) with Tenaga Nasional Berhad (TNB – TTPC’s sole off-taker), the steady operational track record of TTPC’s plant and the Company’s robust debt-servicing ability.

During the review period, TTPC had operated within performance limits stipulated in the PPA and earned full available capacity payments (ACPs). Further, TTPC had managed to fully pass through its fuel cost to TNB.

Based on our sensitivity analysis, TTPC is anticipated to generate an average annual pre-financing cashflow of about RM214 million for the remaining tenure of the Sukuk. This translates into a strong minimum finance service coverage ratio (with cash balances, post-distribution) of 1.80 times. Our cashflow analysis has assumed that TTPC will pay optimum dividends while adhering to its financial covenants throughout the Sukuk’s tenure on a forward-looking basis, as opposed to only in the year of assessment.

As with other independent power producers, the Company’s rating is moderated by inherent regulatory and single-project risks.

TTPC owns and operates a 650-MW combined-cycle, gas-turbine power plant in Kuala Sungai Baru, Perlis, under a 21-year PPA with TNB, which expires on 31 March 2024.

Analytical contact
Serene Tan
(603) 7628 1088
serene@ram.com.my

Media contact
Padthma Subbiah
(603) 7628 1162
padthma@ram.com.my

Date of release: 4 January 2018

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2018 by RAM Rating Services Berhad’s

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