RAM Ratings has reaffirmed the AAA/Stable rating of Pengurusan Air SPV Berhad's (PASB or the Company) RM20 bil Islamic Medium-Term Notes (IMTN) Programme and the P1 rating of its RM2 bil Islamic Commercial Papers (ICP) Programme. The ICP Programme may also be issued as a sustainability sukuk. RAM Sustainability Sdn Bhd has assigned the respective Environmental Benefit (EB) and Social Benefit (SB) ratings to PASB's green and social projects under the Company's Sustainability Sukuk Framework.

The reaffirmation of the ratings is premised on our view that PASB will continue to derive substantial financial flexibility from the Government of Malaysia via Ministry of Finance, Incorporated, PASB's ultimate holding company. PASB is the financing conduit and 100%-owned subsidiary of Pengurusan Aset Air Berhad (PAAB or the Group), the national water asset company mandated to facilitate the water restructuring exercise in Peninsular Malaysia and the Federal Territory of Labuan pursuant to the Water Services Industry Act 2006 (WSIA). The Group is also tasked with developing and financing water infrastructure in these areas.

An irrevocable and unconditional Purchase Undertaking Deed provided by PAAB under the transaction structures gives sukukholders recourse to the Group. Therefore, the ratings of the sukuk reflect PAAB's credit risks. The ratings are also reinforced by PAAB's strategic role as the custodian of national water assets and key facilitator of the water industry's restructuring. Given PAAB's unique public policy function, where profit generation is secondary, the Ministry of Finance (MoF) strongly influences its key operational decisions and has provided firm support to date. All considered, PAAB is deemed a ''dependent'' entity under RAM's rating methodology for government-linked entities. Therefore, its rating essentially mirrors the government's. 

The government's financial backing for PAAB is evident from the guarantee on PASB's unrated RM20 bil IMTN Pro