KUALA LUMPUR, Feb 6 — RAM Rating Services Bhd has reaffirmed the ‘AA2/stable’ rating of UEM Group Bhd’s Islamic medium-term note programme of up to RM2.2 billion (2012/2042), issued through funding vehicle, United Growth Bhd.
In a statement today, RAM said, the rating continued to reflect UEM’s diverse businesses and the sturdy position of its key operating companies, while incorporating expectations of government support in times of need.
UEM, wholly-owned by government investment-holding arm, Khazanah Nasional Bhd, has a strong corporate lineage, it said.
“It is viewed as playing an important role, underpinned by its holdings of concessions in strategic local tolled roads and large tracts of land in Iskandar Puteri, a component of the Iskandar Malaysia economic corridor in Johor, it said.
RAM said the rating was also moderated by the regulatory risks relating to toll-road assets.
“Although the group’s local toll roads have been due for a rate increase in January 2016, the government had decided against it for these expressways in 2016 and 2017,” it said.
Additionally, it said, toll collection at three of PLUS Malaysia Bhd’s toll plazas on the North-South Expressway was discontinued on Jan 1, 2018, as announced in Budget 2018.
“It is understood that PLUS is in discussion with the government on the compensation for the tolls surrendered. In the meantime, principal repayments on the heavy debt load residing at PLUS’s subsidiary, which started in January 2017, may affect future distributions to the group,” it said. — Bernama
