RAM reaffirms Midciti Sukuk’s AAA/Stable rating

RAM Rating Services Bhd has reaffirmed the AAA/Stable rating of Midciti Sukuk Bhd’s Sukuk Murabahah Programme of up to RM3.0 billion in nominal value (2014/2044).

The rating agency said the rating of Midciti Sukuk, as a special- purpose financing vehic le of KLCC Rea l Estate Investment Trust ( KLCC REIT) , ref lected the credit profi le of the REIT.

“Midciti Sukuk has no operations of its own and depends on inter- company payments to meet its obligations.

“The reaffirmation of the rating is premised on our expectation that KLCC REIT’s performance will stay resilient, underscored by strong and steady assets,” the rating agency said in a statement yesterday.

As at end- December 2017, KLCC REIT’s net property income margin remained superior at 95 per cent.

RAM Rat ings said the REIT’s strong operating cashf low of above RM400 million annually, together with super ior coverage ratios as demonstrated by its fixed charge coverage ratio and funds from operations f inancing coverage ratio of 7.49 times and 0. 3 8 times, respectively, were among the highest compared to peers.

“KLCC REIT’s gearing and leverage ratios are still low at 0.17 times and 0.14 times, respectively.

“Going forward, we expect the balance sheet to stay robust, even with the RM500 mi l lion principal coming due in April 2019, as the management has expressed its intention to partially or wholly refinance the amount,” it added. — Bernama