Posted on 07 Apr 2015
Moody's Investors Service has assigned a provisional '(P)A3' senior unsecured rating to the forthcoming US dollar trust certificates (sukuk) issued by Malaysia Sovereign Sukuk Bhd, a special-purpose vehicle set up by the Malaysian government.
In a statement yesterday, Moody's said the rating was at the same level as the long-term localcurrency and foreign-currency issuer ratings of the Malaysian government, as the sukuk certificate holders would effectively be exposed to the government's senior unsecured credit risk.
However, the sukuk certificate holders would not be exposed to the risk of performance of the
portfolio assets relating to the certificates, and would not have any preferential claim or recourse over the trust assets or rights to cause any sale or disposition of the trust assets except as expressly provided under the transaction documents.
Moody's said the proceeds of the sukuk would be used by the issuer to invest in the purchase of an asset pool consisting of Ijara assets, the right to participate in the provision of transportation services in Malaysia and syariah-compliant commodities.
The assets would be managed by the Malaysian government as the agent for the provision of wakala services on behalf of the issuer (acting as trustee for the certificate holders), it said.
It said the government would collect income against the relevant periodic distribution amounts due for each series.
Moody's had in January affirmed Malaysia's sovereign bond rating at 'A3' and maintained the outlook at "positive".
