MARC has affirmed its rating on Celcom Networks’ RM5bn Sukuk Murabahah Programme of AA+IS and continues to maintain a negative outlook on the rating.
CNSB provides network telecommunication services to its parent, Celcom Axiata, through network telecommunication assets. The rating and outlook are premised on the overall credit profile of the Celcom group given the financial and operational linkages within the group. This approach is supported by a letter of support from Celcom to maintain 100 per cent direct or indirect equity interest in CNSB throughout the Sukuk tenure.
The affirmed rating is mainly driven by Celcom’s position as one of the leading domestic mobile network operators with strong operating cash flow (CFO) generating ability. The continued negative outlook reflects Celcom’s lack of improvement in its financial metrics during the period under review. In MARC’s opinion, there is a potential for further weakening in Celcom’s credit metrics given the increasingly challenging operating environment for telco players.