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RAM reaffirms Midciti Sukuk's AAA/Stable rating.

RAM Rating Services Bhd has reaffirmed the AAA/Stable rating of Midciti Sukuk Bhd's Sukuk Murabahah Programme of up to RM3.0 billion in nominal value (2014/2044).

The rating agency said the rating of Midciti Sukuk, as a special-purpose financing vehicle of KLCC Real Estate Investment Trust (KLCC REIT), reflected the credit profile of the REIT.

'Midciti Sukuk has no operations of its own and depends on inter-company payments to meet its obligations.

'The reaffirmation of the rating is premised on our expectation that KLCC REIT's performance will stay resilient, underscored by strong and steady assets,' the rating agency said in a statement today.

As at end-December 2017, KLCC REIT's net property income margin remained superior at 95 per cent.

RAM Ratings said the REIT's strong operating cashflow of above RM400 million annually, together with superior coverage ratios as demonstrated by its fixed charge coverage ratio and funds from operations financing coverage ratio of 7.49 times and 0.38 times, respectively, were among the highest compared to peers.

'KLCC REIT's gearing and leverage ratios are still low at 0.17 times and 0.14 times, respectively.

'Going forward, we expect the balance sheet to stay robust, even with the RM500 million principal coming due in April 2019, as the management has expressed its intention to partially or wholly refinance the amount,' it added. - Bernama

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Publication:Malay Mail Online (Petaling Jaya, Malaysia)
Date:May 30, 2018
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