RAM lifts rating watch on Malakoff PDS

KUALA LUMPUR: RAM Rating Services Bhd lifted the Ratings Watch (with a negative outlook) of Malakoff Corp Bhd’s private debt securities (PDS) totalling RM7.9bil on Friday.

The ratings agency said the decision to lift the Rating Watch was after the government abolished the windfall profit levy on independent power producers (IPPs) in exchange for a one-off payment equivalent to an amount that is payable for one year.

The PDS included the RM600mil Commercial Papers/Medium-Term Notes Programme (2007/2014); RM5.60bil Medium-Term Notes Programme (2007/2025) and RM1.7bil Cumulative Non-Convertible Islamic Junior Sukuk (2007/2057).

RAM Rating also lifted the Rating Watch (with a Negative Outlook) on the ratings for the PDS of Special Power Vehicle Bhd and Magna Segmen Sdn Bhd with immediate effect.

The PDS involve Special Power Vehicle’s RM800mil Class A Islamic Medium-Term Notes Facility (2005/2022) and RM215mil Class B Islamic Medium-Term Notes Facility (2005/2034) and Magna Segmen’s RM45mil Fixed Rate Serial Bonds (2003/2017) and RM25mil Commercial Papers Programme (2003/2010).

RAM Rating Services Chief Executive Officer Wong Fook Wah said the “one-year impact will not be detrimental to the ratings”.

RAM Ratings’ prior assessment had shown that IPP parent-level and subordinated bonds would be the most severely affected by the windfall profit levy if it had been continued.

The affected debt issues were placed on Rating Watch (with a Negative Outlook) on Aug 15, following RAM Ratings’ assessment of the effects of Windfall Profit Levy (Electricity) Order 2008 on its portfolio of IPP-related debt ratings.

On the suspension of the renegotiation of Power Purchase Agreements (PPAs) with Tenaga Nasional Bhd (TNB) until a comprehensive study on the restructuring of the power sector is completed.

"Whichever the outcome, the eventual arrangement should be equitable to all parties involved," he said.

The ratings agency said Ranhill Powertron’s debt papers remain on Rating Watch (with a Negative Outlook) pending the resolution of project-specific issues.

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