RAM Ratings Reaffirms AA1 Rating for Encorp Systembilt’s MYR 1.575 Billion Sukuk Murabahah

The AA1/Stable rating of Encorp Systembilt (Encorp)’s MYR 1.575 billion Sukuk Murabahah has been reaffirmed by RAM Ratings (RAM). Encorp is the concessionaire for the development of 10,000 units of teachers’ quarters across Malaysia, and it, therefore, receives monthly concession payments from the Government of Malaysia. These payments are not subject to performance-related deductions, as it is not required to carry out any maintenance of the facilities.

Rating Rationale

This reaffirmation reflects forecasts that the Sukuk’s strong debt coverage will be sustained by a steady inflow of monthly concession payments, supported by its tight transaction structure. Throughout Sukuk’s tenure, RAM expects Encorp to see minimum and aver...