RaM Ratings downgrades al Bayan’s sukuk rating to D

KUCHING: RAM Ratings Services Bhd ( RAM Ratings) has downgraded the rating of the RM1 billion sukuk wakalah ( 2013/ 2023) issued by ABHC Sukuk Bhd, the special-purpose vehicle of Al Bayan Holding Group (Al Bayan).

The re a s on for t hi s d own g r a d i n g was Al Bayan’s fai lure to redeem RM100 million of outstanding sukuk on the maturity date of December 16, 2016, as conf irmed by the faci l ity agent, HSBC Bank ( Malaysia) Bh d ’ s a n n k u n c eme n t through the Fully Automated System for Issuing or Tendering ( FAST).

“Under RAM rat ing’s definitions, a sukuk rated D is either currently in default or faces imminent default on its financial obligations, whether or not it is formally declared,” it said in a statement.

“A d d i t i o n a l l y, the D rating may also ref lect a distressed exchange, the filing of bankruptcy and or other actions pertaining to the issuer that could jeopardise the payment of the Sukuk in question.”

Al Bayan is a family- owned, Saudi- based conglomerate, mainly involved in specialised c onst ruc t ion of publ ic infrastructure and the supply of a wide range of equipment and IT products and services, primari ly servicing the government.

ABHC is a special- purpose vehic le incorporated in Malaysia as a conduit to facilitate the Group’s sukuk transaction.

Under a Kafalah agreement in favour of ABHC, the Group provides an irrevocable and unconditional guarantee to the sukuk holders.

As such, the enhanced rating of the sukuk is based on Al Bayan’s credit profile.