RAM Ratings has assigned a preliminary enhanced rating of AAA(s)/Stable to Kami Builders Sdn Bhd's (KBSB or the Company) proposed RM90 mil Tranche 1 SRI Sukuk Murabahah (Tranche 1) under its RM300 million ASEAN Sustainability SRI Sukuk Programme. Tranche 1 will be fully secured by a standby letter of credit (SBLC) to be issued by UBS Switzerland AG (UBS). Accordingly, the rating solely reflects UBS's credit strength, which RAM has assessed as AAA/Stable(pi).

Kami Builders is a wholly owned subsidiary of Wawasan QI Properties Sdn Bhd (WQIP) and serves as WQIP's property investment and development arm. Proceeds from Tranche 1 will be partly used to fund the construction of a new university campus, estimated at RM150 mil in Ipoh, Perak. The balance of construction cost will be funded through advances from WQIP.

Upon completion, the campus will be leased to Global Integrated Teaching Associates (GITA), the operator of Quest International University (QIU or the University), for a minimum tenure of 20 years. GITA is owned by WQIP (65%), Dato' Sri Vijay Eswaran (15%), Dato' Dr R. Subramaniam (10%) and the Perak state government (10%). Except for the latter two, the shareholders are part of the broader QI Group, a diversified group of companies involved in global direct selling (MLM), real estate, hospitality and retail.

RAM's assessment of the SBLC focuses on the extent to which the credit risk of Tranche 1 is effectively substituted by that of the SBLC provider, as well as any residual risks that could impair the timely and full repayment to sukukholders. As part of our enhanced due diligence, we engaged with UBS as SBLC provider, Adnan, Sundra & Low as the transaction legal counsel, Public Investment Bank as principal advisor and lead arranger, and the project sponsors including QI Holdings. QI Holdings also appointed Homburger AG, a leading Swiss law firm to provide an independent opinion on the validity and enforceability of the SBLC under Swiss jurisdiction.