SINGAPORE, Aug 29 — The rated sukuk issued by three Malaysian corporates — Petroliam Nasional Bhd (Petronas), Axiata Group Bhd and Sime Darby Bhd — do not have any material asset-backed or equity features, said Moody’s Investors Service.
Moody’s said based on its analysis, available in a report titled “Petronas, Axiata, Sime Darby: A Comparison of Three Malaysian Corporate Sukuk”, the sukuks shared the same credit risk as other senior unsecured obligations of the underlying corporates.
“The investors in these sukuk were ultimately dependent on the creditworthiness of the corporates backing them,” it said in a statement today.
Petronas’s sukuk is rated ‘A1’ with stable outlook, Axiata (Baa2 stable) and Sime (A3 stable).
Simon Wong, Moody’s Vice President and co-author of the report, said the investors of the three sukuk ultimately relied on the creditworthiness of the corporates backing them to ensure that both the periodic distribution and dissolution or redemption amounts were paid when due.
“In other words, these payment obligations rank pari passu with Petronas’, Axiata’s and Sime’s other certificates and other senior unsecured obligations of the respective company.
Moody’s report said all three sukuk applied an ‘Al-Ijarah’ asset lease structure, in which the three firms sold the beneficial ownership of the sukuk assets to a special-purpose vehicle that was funded by certificate holders.
“A crucial credit feature is that all three firms buy back the beneficial ownership upon the maturity of the sukuk, providing repayment of principal.
“In addition certificate holders have no priority recourse to the sukuk assets in the event of a default of the corporate,” it said.
According to research firm Dealogic, Malaysia dominates the global corporate sukuk market, accounting for 78 per cent of total bonds issued last year.
These bonds have tripled in issuance value to US$19 billion (RM63 billion) between 2010 and 2012. – Bernama