RAM Ratings reaffirms Widad Capital’s AA2/stable rating

KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the AA2/Stable rating of Widad Capital Sdn Bhd’s Sukuk Murabahah Programme of up to RM110.0 million in Nominal Value.

Thiswaspremisedonexpectation that the company’s stable cashflow and robust debt-servicing ability would remain underpinned by predictable monthly contractual payments, pursuant to its facilities maintenance contract with the Public Works Department (PWD) to maintain the National Palace, it said in a statement yesterday.

According to a schedule under the contract, Widad Capital is entitled to monthly payments from PWD.

However, these monthly receipts are conditional on the performance of the maintenance work, with a portion being the provisional maintenance work, which is less certain in terms of timing and value.

Under RAM’s stressed scenario, Widad Capital is projected to register respective minimum and average finance service cover ratios, with cash balances, calculated over a 12-month period in payment months, of 1.93 and 2.35 times through the remaining tenure of the sukuk.

“These are despite our assumption of an 80 per cent reduction on the remaining provisional sum,” the rating agency said, adding that as at end-May 2018, about 23 per cent of the initial contracted value of RM68.11 million had been realised.