[RAM] Silver Sparrow misses principal payment of guaranteed MTN, seeks maturity extension

RAM Ratings has received confirmation that Silver Sparrow Berhad (Silver Sparrow or the Company) failed to meet repayment of the remaining principal amount of RM61 mil due on 8 December 2023 under the Company’s RM515 mil Guaranteed MTN Programme (2011/2023). As bondholders are protected by irrevocable and unconditional guarantees (Table 1) from Bank Pembangunan Malaysia Berhad (rated AAA/Stable/P1 by RAM), Malayan Banking Berhad (AAA/Stable/P1) and OCBC Bank (Malaysia) Berhad (AAA/Stable/P1), the AAA(bg)/Stable rating of the MTN Programme continues to reflect the credit enhancement afforded by the guarantees.

Table 1: Guarantees of the MTN Programme

* Relates to the nominal value of the MTN of up to RM515.0 mil and 1 coupon payment of the MTN amounting to RM10.0 mil.

A special-purpose vehicle set up as a funding conduit to issue the MTN, Silver Sparrow is wholly owned by Aseana Properties Limited (the Group), a closed-end fund listed on the London Stock Exchange.

Based on the public announcement issued by Aseana on 8 December 2023, Silver Sparrow is seeking indulgence from bondholders for a 60-day extension given the delay in disposing its hotel in Sandakan and the Harbour Mall Sandakan (collectively, the Sandakan Assets), the construction of both of which was funded by the MTN Programme. The sale was initially targeted to be concluded by 30 September 2023, with part of the RM165 mil disposal proceeds to be used to repay outstanding MTN. Its completion, however, has been held back pending certain regulatory approvals.

The bondholders have 30 days to crystallise the guarantees following the missed payment event which under the trust deed constitutes an event of default. If the bondholders choose to call on the guarantees, the guarantors will then have 10 business days – from the receipt of claim notice – to remit payments to the facility agent.

We will continue to monitor transaction developments and provide necessary updates when more information is made available. 


Analytical contacts
Seri Nuralya Munawir
(603) 3385 2484
nuralya@ram.com.my

Thong Mun Wai
(603) 3385 2522
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my