The affirmed rating of AA-ID (double A minus, Islamic Debt) assigned to Guthrie Property Development Holding Berhad’s (GPDH) RM750 million Islamic Medium Term Notes (MTN) programme reflects GPDH’s reputable position as a leading property developer in the country and its sound financial profile. In addition, other positive factors are GPDH’s vast land holding and its commendable track record of quality and timely completion of developments. Moderating the rating is the inherent cyclicality of the domestic property industry.

GPDH, a subsidiary of Kumpulan Guthrie Berhad (Guthrie), is principally involved in property development activities. Amongst its major on-going developments are Bukit Jelutong, Bukit Subang, Denai Alam and Sungai Kapar Indah. The impressive take-up rates of its past launches is a testament of GPDH’s unique developments which incorporate new lifestyle concept appealing to all income levels. In the near to medium term, GPDH’s development thrust will be on the vast tract of plantation land along the Guthrie Corridor Expressway.

Revenue continued on an upward trend, reaching RM561.2 million at the end of Dec 2004 on the back of increased sales in its Bukit Jelutong (BJ)



development. Moving forward, GPDH has forecasted strong revenue growth for the next five years driven mainly by the BJ and Denai Alam (formerly known as Bukit Subang 2) developments. Operating profit margin consistently hovered above the industry figure, averaging slightly over 20% for the five-year period.

Under the issue structure, repayment risk is mitigated by a progressive build-up of monies in the Finance Service Reserve Account (FSRA) 24 months before the scheduled principal redemption dates. The maintenance of a pre-funded amount in the FSRA equivalent to one profit payment mitigates liquidity risk.

Upon the drawdown of the first two tranches of the Islamic MTN programme amounting to RM400 million, GPDH’s debt equity ratio increased to 0.8x. The debt-equity ratio is capped at 1.1 times under the issue structure. MARC notes that at present, the Islamic MTN forms GPDH’s only borrowings.

Financial flexibility is derived from the Group’s holding of large tracts of unencumbered land; and its membership of the Guthrie group; one of the leading plantation companies in the country.