BUSINESS

RAM RATINGS REAFFIRMS AA1/STABLE RATINGS OF YTL CORP’S DEBT ISSUES

15/03/2019 12:27 PM

KUALA LUMPUR, March 15 (Bernama) -- RAM Rating Services Bhd (RAM Ratings) has reaffirmed the AA1/Stable ratings of YTL Corporation Bhd’s (YTL Corp) RM500 million medium-term notes (MTN) programme (2004/2019) and RM2 billion MTN programme (2013/2038).

The rating agency said the reaffirmation of the ratings was supported by the ongoing stream of dividend payments from YTL Corp’s operating entities to service its company-level debts.

“Despite an expected decline in the dividend-paying capacity of key dividend contributors such as YTL Cement Bhd and Wessex Water Services Ltd (WWSL), YTL Corp’s debt-servicing indicators remain within our rating threshold, supported by the group’s robust financial flexibility.

“The ratings reflect YTL Corp’s strong business profile, backed by its diversified earnings base as a conglomerate,” it said in a statement today.

RAM Ratings said steady contributions from WWSL -- the group’s water and sewerage business -- as well as stable and predictable income from its real estate investment trusts (REITs) alleviated the downside pressure from the competitive operating landscape of its Singaporean power and Malaysian cement divisions.

 As at end-June 2018, YTL Corp’s RM1.89 billion of company-level short-term debts were amply covered by its RM515.12 million of company-level cash and YTL Power’s RM9.68 billion of unencumbered cash holdings.

RAM Ratings said the group’s ratings were also supported by its robust financial flexibility, as reflected in the quality and equity values of its operating entities, as well as those of YTL Power.

“Among others, the management has represented that it is able to generate cash flow from the strategic divestment of small stakes in these operating entities, such as the partial divestment of its stake in PT Jawa Power in 2011 and the unlocking of cash via the injection of hotel assets into YTL Hospitality REIT,” it added.

-- BERNAMA

 


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