Al-`Aqar Healthcare REIT Annual Report 2020

Financial Reports 145 18. Islamic financing (cont’d) Sukuk Ijarah (cont’d) Nominal value Profit 2020 2019 rate RM RM Rating (%) Non-current Issue II - Tranche 1 Issued on 4 May 2018 Class A IMTNs 220,000,000 220,000,000 AAA 4.64 Class B IMTNs 23,000,000 23,000,000 AA2 4.95 Class C IMTNs 220,000,000 220,000,000 Unrated 5.60 Class C IMTNs (iv) 112,000,000 112,000,000 Unrated Total (iii) 575,000,000 575,000,000 Issue II - Tranche 2 Issued on 20 December 2018 Class A IMTNs 75,000,000 75,000,000 AAA 4.68 Class B IMTNs 37,000,000 37,000,000 AA2 4.98 Total (iv) 112,000,000 112,000,000 The Sukuk Ijarah Programme has the following significant covenants: • The Group has to maintain and build up the Finance Service Reserve Account (“FSRA”) an amount equivalent to 6 months periodic payments payable under the relevant tranche of Sukuk Ijarah (12 months period payments upon the occurrence of a Trigger Event defined under the Sukuk Ijarah Trust Deed dated 29 April 2013). The Fund in the FSRA may be invested in permitted investments but are not available for general use. • The Group shall at all times, maintain the following Finance Service Cover Ratio (“FSCR”): a) FSCR at Issue level of not less than 1.5 times; and b) FSCR at Al-`Aqar Healthcare REIT level of not less than 1.5 times; and c) such other financial covenant(s) as may be determined by RAM Rating Services Berhad (“RAM”) and to be mutually agreed to by Al-`Aqar Capital Sdn Bhd The Sukuk Ijarah Programme was secured against the investment properties as disclosed in Note 10 amounting to RM1,247,320,000 (2019: RM1,249,200,000). The Manager believes that the Group will meet their short term obligation as and when they fall due on the basis that the Group will be able to refinance their borrowings when it matures. As at the reporting date, the Group received various proposals from financial institutions on the refinancing plan. As at the date of the financial statements, the Group is assessing the available options and will finalise the refinancing plan before the maturity date in May 2021. Taking into consideration the viability of these available options, the Group is confident in materialising its refinancing plan before the maturity date. Accordingly, the Manager is of the opinion going concern basis used in the preparation of financial statements is appropriate. Murabahah Tawarruq Term Financing-i On 30 November 2018 the Fund obtained an Islamic financing facility (“Murabahah Tawarruq”) amounting to RM29,900,000 from Ambank Islamic Berhad to part finance the outstanding balance in relation to an investment property purchased in prior years amounting to RM38,900,000. The transaction costs incurred for the Murabahah Tawarruq was RM225,761. Notes to the Financial Statements For the Year Ended 31 December 2020