Therefore, unless otherwise mitigated, shifts in the rating or credit quality of Goldman Sachs Group, Inc., the rating or credit quality of any of the debt service accounts, debt service reserve account
, or working capital account providers, or the rating or credit quality of the Sacramento Municipal Utility District below the current rating on the bonds, would result in a downgrade.
The project benefits from a debt service reserve account
(DSRA) sized to maximum annual debt service (MADS) based on a five-year forward DS look-ahead.
Under the BG Facility, all risks associated with the outstanding MYR74m nominal value of the senior bonds will be absorbed by Maybank.Together with the emplacement of the BG Facility, SSS is required to progressively build up an amount equivalent to the next principal redemption due under the senior bonds and its MYR22m junior secured serial notes B, which is on top of the existing requirement to always maintain at least MYR24.5m in the debt service reserve account
and other financial covenants, RAM Ratings noted.
A 12-month debt service reserve account
(DSRA) at the GET level will be funded from existing cash at closure.
Given the management's representation that it intends to maximise distributions to shareholders, the analysts expect the company's DSCR (with cash balances, post-distribution) to reach at least 1.48 times over the remaining tenure of the ABBA bonds, while complying with its financial covenants, in particular maintaining the required debt service reserve account
(DSRA) balance and a minimum DSCR of 1.25 times.
The distributions are permitted under the bonds' trust deed, provided the company continues adhering to its financial covenants, including a post-distribution FSCR of at least 1.4 times, making sure its debt service reserve account
fully covers its debt obligations due in the next six months, and ensuring that its debt-to-equity ratio does not exceed 80:20, RAM Ratings elaborated.
Prior to final maturity, transactional cash flows earmarked for release to the gas purchasers, along with funds in the junior debt service reserve account
($4.6 million), are also available to meet scheduled debt service in the event of a gas purchaser default.
The rating is also supported by the opening of a Debt Service Reserve Account
and Major Maintenance Reserve Account after the project becomes operational.
They benefit from a six-month debt service reserve account
and are exposed to variations in the BNDES' long term interest rate, Taxa de Juros de Longo Prazo (TJLP).
The rating also factors in the collection from existing toll plazas, creation of debt service reserve account
and fixed-price nature of the engineering, procurement and construction contract.
The debt structure also includes a six-month debt service reserve account
as well as covenants that includes dividend distribution triggers at 1.20x.
The debt service reserve account
is funded with cash and no additional new debt issuances are anticipated in the near to medium term.