MARC assigns A+ rating to Yinson’s proposed IMTN programme
KUCHING: Malaysian Rating Corporation Bhd (MARC) has assigned a preliminary rating of A+ to Yinson Holdings Bhd’s proposed RM1 billion Islamic Medium-Term Notes (IMTN) programme with a stable outlook.
This follows the corporate credit rating of A+ that MARC assigned to Yinson on June 23, 2021.
The rating on the IMTN programme is driven by Yinson’s strong business profile in the floating, production, storage and offloading vessels (FPSO) segment, sizeable long-term FPSO contracts and healthy profit margins.
The key moderating factors are the weak-to-moderate credit profile of most of its charterers and the high leverage position of its holding company due to recourse borrowings.
With five FPSOs (a sixth is under construction) and one FSO, Yinson is considered as a large independent global player in the FPSO segment.
The group has an FPSO order book of US$9.7 billion as at endJuly 2021 with firm contract tenures up to 25 years.
“We view that as a result of oil price recovery since the second quarter of 2020 (2Q20), the prospects for the upstream oil and gas industry is stronger than it has been in recent years and would support growth in the FPSO segment,” MARC said.
For the first half of financial year ending January 2022 (1HFY22), group revenue (excluding construction revenue from a new FPSO) was relatively stable at RM696 million (1HFY21: RM684 million), owing mainly to the recurrent income from charterers under existing longterm contracts.
Operating profit margin stood at 27.6 per cent. Gross debt-toequity (DE) ratio stood at 3.41fold (net DE: 2.63-fold).