GFM’s RM165m sukuk gets ‘AA3/stable’ from RAM Ratings

KUALA LUMPUR: GFM Services Bhd’s proposed RM165 million sukuk tranche, to be issued by wholly-owned funding vehicle Dynasty Harmony Sdn Bhd (DHSB), has received a preliminary “AA3/stable” rating from RAM Rating Services Bhd (RAM Ratings).

The 10- to 14.5year sukuk is part of a RM300 million Islamic mediumterm note programme.

RAM Ratings said yesterday the rating reflected DHSB’s strong debt coverage, underpinned by the stable and predictable residual concession cashflow of KP Mukah Development Sdn Bhd, which held a concession to provide asset management services for Universiti Teknologi Mara (UiTM) Mukah campus in Sarawak until September 2035.

RAM Ratings said GFM, which acquired the entire stake in KP Mukah on November 27, was a leading local provider of integrated facilities management and consultancy services, with an 18year track record.

It noted that since construction of the facilities and infrastructure were completed in October 2015, KP Mukah had been receiving fixed and prompt monthly availability charges from a strong counterparty, namely the government, through UiTM.

“Based on cash flow analysis, DHSB is projected to register a minimum subordinated finance service cover ratio (with cash balances and calculated in payment months) of 1.38 times throughout the tenure of the proposed sukuk.”

RAM Ratings said sukuk holders would only be entitled to profit payments in the first 10 years while principal repayment would start in October 2028 after the full redemption of the facility.

DHSB is projected to register a minimum subordinated finance service cover ratio... of 1.38 times throughout the tenure of the proposed sukuk. RAM RATING SERVICES BHD