RAM Ratings maintain ratings for FHT sponsored medium-term notes

RAM Ratings maintain ratings for FHT sponsored medium-term notes 1
Temporary suspension to The Westin Kuala Lumpur’s operations in
itself does not impact ratings of NVSB’s MTNs

SINGAPORE: RAM Rating Services Berhad has maintained ratings for the Frasers Hospitality Trust’s sponsored RM 477.48 million medium term Notes Series 2019-A issued by Notable Vision Sdn. Bhd. under NVSB’s RM750 million Medium Term Note Programme.

The Notes Series 2019-A were issued in connection with the securitisation of The Westin Kuala Lumpur, one of the assets within the portfolio of Frasers Hospitality Trust, and comprise (i) RM95 million Class A Senior Medium Term Notes (“Class A Senior MTNs”), (ii) RM95 million Class B Junior Medium Term Notes (“Class B Junior MTNs”), and (iii) RM287.48 million Class C Junior Medium Term Notes (“Class C Junior MTNs”).

As announced on 8 May 2020, The Westin Kuala Lumpur’s operations have been suspended from 1 May 2020 to 30 June 2020 in view of the hotel’s low occupancy level arising from the impact of the Covid-19 outbreak. Despite that, RAM Ratings has stated that there are no immediate concerns over NVSB’s ability to meet its near-term debt obligations under the Notes Series 2019-A, and has maintained the AAA rating with stable outlook for NVSB’s Class A Senior MTNs.

RAM Ratings has also kept the B2 and C3 ratings, both with stable outlook, for NVSB’s Class B Junior MTNs and Class C Junior MTNs.

Overall, RAM views that it is premature to conclude if the economic stress induced by the Covid-19 pandemic will cause merely a temporary dip in demand for lodging or whether it will permanently impair TWKL’s cashflow and value. Economic recovery remains uncertain, despite the government’s decision to restart the economy under a Conditional MCO effective 4 May 2020. RAM will closely monitor developments and reassess if necessary. We will conduct the annual rating review for this transaction by 3Q this year.

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