MARC has affirmed its AAAIS rating on TNB Northern Energy’s outstanding Sukuk of RM1.595bn with a stable outlook.
TNB Northern Energy is a funding vehicle of its parent TNB Prai, a wholly-owned subsidiary of Tenaga Nasional Berhad, for the construction of a 1,071.43-megawatt combined-cycle gas turbine power plant in Seberang Perai Tengah, Penang. TNB Prai has been receiving availability-based revenue under a 21-year power purchase agreement with offtaker TNB since February 2016 when the gas power plant commenced operations.
The affirmed rating on TNB Northern Energy is equalised to its ultimate parent, TNB, on which MARC currently has a senior unsecured rating of AAA/Stable. The rating equalisation is based on commitment from TNB to provide post-completion rolling guarantee in favour of Sukukholders. MARC’s assessment is further underpinned by TNB’s undertaking to maintain full ownership of TNB Northern Energy as well as TNB’s substantial operational and financial linkages with both TNB Northern Energy and TNB Prai.