KUALA LUMPUR: Malaysian Rating Corp Bhd (MARC) has affirmed its ratings of MARC-1IS /AA-ISon UEM Edgenta Bhd’s Islamic Commercial Papers (ICP) and Islamic Medium-Term Notes (IMTN) under its Sukuk Murabahah programme of up to RM1 billion with stable outlook.
The affirmed ratings primarily reflect UEM Edgenta’s strong business profile as a longstanding provider of hospital support and highway maintenance services.
These businesses are undertaken through long-term agreements and generate steady income. The long-term rating is also underpinned by MARC’s assessment of parental support from UEM Group, MARC noted.
UEM Edgenta’s recent disposal of its 61.2 per cent subsidiary Opus International Consultants Ltd (OIC), a New Zealand-based company involved in asset consultancy, has strengthened the group’s credit metrics.
Part of the disposal proceeds of RM463 million was used to pare down borrowings, reducing group consolidated leverage to 0.35 times at end-2017 from 0.64 times as at end-2016.
The stable outlook incorporates MARC’s expectations that UEM Edgenta would maintain credit metrics that are commensurate with the current rating band.
“However, a sharp increase in leverage and/or significant changes in the non-concession business that would affect its credit profile could result in downward rating pressure,” the note said.