Sepangar’s AA1/Stable Sukuk Rating Reaffirmed by RAM Ratings

Sepangar Bay Power (Sepangar)’s MYR 575 million nominal value Sukuk Murabahah has been reaffirmed as AA1/Stable by RAM Ratings. In Kota Kinabalu, Sepangar owns and operates a 100MW combined-cycle gas turbine power plant. It signed a 21-year Power Purchase Agreement (PPA) with Sabah Electricity (SESB) in 2005, which is in force until 2029.

Rating Rationale

Sepangar's strong cash flow to fulfil its debt obligations is reflected in the rating, which is bolstered by the favourable terms of its PPA with its sole off-taker, SESB. Despite a difficult year marked by COVID-19 and various Movement Control Orders, Sepangar was mostly unharmed because it provided important services and was allowed to continue operating.

Details

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