RAM said the long-term rating for AmFinance’s RM200mil subordinated bonds had been also reaffirmed at A3, with a stable outlook.
It said AmFinance’s ratings had always been moderated by its weak asset quality.
Non-performing loans (NPLs) rose up to RM1.60bil from RM1.35bil last year, some of which emanated from old loans that turned bad during the period.
Despite writing off large chunks of NPLs, as at end March 31, absolute gross NPLs and gross NPL ratio remained above RM3.1bil and 11%, respectively, while net NPL ratio went up slightly to 9.17%, RAM said.
The agency noted that efforts were being put in place to improve the asset quality, such as implementation of the debt management system. – Bernama
The reaffirmation reflected the company’s continued dominant position in the provision of aviation services to the oil and gas industry as well as favourable outlook prevailing in the industry, MARC said.
The rating agency said its reaffirmation also reflected the company’s strong cash flow protection to bondholders derived from the high proportion of contractual revenue and monies deposited in the designated accounts.
MARC said MHSA had a competitive edge in the provision of helicopter services to the oil and gas industry, evidenced by its established business relationship with multinational companies such as Exxon-Mobil Exploration and Production Malaysia Inc, Petronas Carigali Sdn Bhd and Sarawak Shell Bhd. – Bernama