[RAM] RAM Ratings upgrades Ideal Water Resources' Tranche 2 Sukuk to AA1 after dividend assignment

RAM Ratings has raised from AA₂/Stable to AA₁/Stable the rating of the RM255 mil Tranche 2 Sukuk (2025/2034) (Tranche 2 Sukuk) under Ideal Water Resources Sdn Bhd’s (IWR, the Issuer) existing Sukuk Murabahah Programme of up to RM1 bil (2023/-). The upgrade follows the execution of a Dividend Assignment by TRIplc Berhad in favour of Tranche 2 investors. 

IWR, a funding vehicle of Puncak Niaga Holdings Berhad (Puncak Niaga or Group), has no business of its own. It is entirely dependent on cash flows from its sister company, TRIplc Ventures Sdn Bhd (TVSB) (a TRIplc Berhad subsidiary), which services the Sukuk through concession payments under a 23-year concession agreement. The cash flows consist of coupon and principal repayments on TVSB’s Senior and Junior MTN as well as dividend streams after it fulfils its own operational obligations. TVSB is the concessionaire for the development and maintenance of Zone 1 Phase 2 of the Universiti Teknologi Mara campus in Puncak Alam, for which it receives monthly concession payments in the form of Availability Charges and Maintenance Charges.

The final AA₂/Stable rating assigned to the Tranche 2 Sukuk in July 2025 had been notched down to reflect IWR’s subordinated position to TVSB’s lenders then, in the absence of the Dividend Assignment as part of the security package. The transaction rating was expected to be upgraded after the Dividend Assignment was executed. 

Structural restrictions and covenants further lend support to the transaction’s credit strength. In 2025, TVSB continues to receive timely concession payments, with receipt days well within RAM’s sensitivity of a three-month delay. As key performance indicators were maintained above the required threshold, no deductions were incurred. We expect the transaction’s minimum and average finance service coverage ratios (with cash, post-distribution) to clock in at 1.53 times and 2.31 times, respectively, comfortably above the requirement for an AA₁ rating of 1.50 times for a low-complexity private finance initiative/public-private partnership project. 

Please refer to the rating rationale reports dated 12 June 2025 and 4 July 2025 for more information on the transaction’s structural features and highlights. We will maintain surveillance of the transaction as long as the Sukuk remains outstanding.


Analytical contacts
Chew Chiang Lim
(603) 2708 8297
chianglim@ram.com.my

Davinder Kaur Gill
(603) 2708 8220
davinder@ram.com.my

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