Kuala Lumpur: Sukuk Ijarah Program of Tanjung Bin Power Sdn Bhd has been reaffirmed the AA2 long-term rating by RAM Ratings. The Ijarah program is of up to RM4.5 billion in nominal value (2012/2029), with a “stable” outlook.
The rating reflects Tanjung Bin’s sturdy business profile, underscored by the favorable terms of its power purchase agreement (PPA) with Tenaga Nasional Bhd (TNB), RAM said in a statement.
“It is also supported by the company’s robust debt-coverage levels on the back of a projected pre-financing cash flow of around RM1 billion annually between December 2013 and 2019 financial years, which will taper to an average of around RM390 million up to fiscal 2029,” it said.
“This is envisaged to translate into finance service coverage ratio of at least 1.65 times,” it added.
RAM expected Tanjung Bin to adhere to its financial covenants throughout the tenure of the sukuk on a forward-looking basis, as opposed to only during the year of assessment.
Tanjung Bin is an independent power producer that has been granted the right to construct, own and operate a 2,100 MW coal-fired power plant in Tanjung Bin, Johor, for 25 years under the PPA with TNB which expires on Sept 27, 2031.