News Column

RAM reaffirms AAA(s) rating of KLIA Berhad's Islamic Notes Facility

September 3, 2014

RAM Ratings has reaffirmed the enhanced AAA(s) rating of KL International Airport Berhad's (KLIA Berhad or the Company) MYR 4.06 billion Bai' Bithaman Ajil Notes Issuance Facility (2003/2015) (KLIA Notes Facility), with a stable outlook.

The enhanced rating is premised on the unconditional and irrevocable guarantee by the Government of Malaysia (GoM) to repay all amounts due under the KLIA Notes Facility.

Incorporated on 29 May 1993, KLIA Berhad is wholly owned by the GoM via the Ministry of Finance (Incorporated) (MoF). The Company had been set up as a conduit for the GoM to fund the construction and development of Kuala Lumpur International Airport (KLIA).

Upon the completion of KLIA in 1998, the ownership and all outstanding liabilities of the airport had been transferred to the MoF. In 1999, however, the GoM advised the Company to reinstate the outstanding liabilities in relation to the construction of the airport. Since then, KLIA Berhad has been responsible for the repayment of all outstanding liabilities, including the KLIA Notes Facility; the MoF undertakes to provide all the necessary funding to settle these commitments.

The aggregate face amount of the Notes is limited to MYR 6.10 billion, comprising MYR 4.06 billion of Primary Notes and MYR 2.04 billion of Secondary Notes. As of end-June 2014, MYR 3.50 billion of the MYR 4.06 billion of Primary Notes issued had been redeemed while MYR 1.62 billion of the MYR 2.04 billion of Secondary Notes issued had been repaid.

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Source: CPI Financial

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