Gerbang Perdana CIQ Sdn Bhd’s (“Gerbang Perdana CIQ”) RM1.7 billion Seven Year Medium Term Notes (“MTN”) issuance programme rating has been reaffirmed at AAA by MARC. The rating carries a stable outlook. The rating reflects the strength of the sole off-taker, The Government of Malaysia (“GOM”) vide its unconditional and irrevocable obligation to repay stipulated sums indicated on Facility Payment Certificates (“FPC”) issued in satisfaction of progress work completed. These FPCs’ which are assigned to note holders as security constitute the primary source of repayment.

Gerbang Perdana Sdn Bhd (“GPSB”), the holding company of Gerbang Perdana CIQ, is a private limited company specifically incorporated to undertake the development of the Gerbang Selatan Bersepadu Project (“GSB Project”). GPSB is owned by a consortium of three companies led by Merong Mahawangsa Sdn Bhd (“MMSB”) with a 60% equity stake, with the remaining 40% equally owned by Detik Nagasari Sdn Bhd (“DNSB”) and DRB-HICOM Berhad. On 3 November 2006, a share sale agreement was entered between MMSB and DNSB, where the latter is disposing off its entire 20% shareholding in GPSB to MMSB. The sales transaction is expected to be completed in February 2007.

As at November 2006, a total of RM1,138.4 million has been raised from the MTN issuance programme and on-lent to GPSB to finance the construction of the new Integrated Customs, Immigration and Quarantine Complex (“CIQ Complex”) at Bukit Chagar, Johor Bahru.

Since the inception of the MTN issuance programme, there have been no changes in the financing structure, with Gerbang Perdana CIQ only issuing the MTNs once the GOM, via the Ministry of Finance, endorses the certified Interim Certificates by issuing the FPCs.

The cancellation of the Bridge Project in April 2006 resulted in GPSB having to review the completion dates for Section 1 (30 September 2006) and Section 2 (31 October 2006) under the CIQ Complex project. This was due to the fact that certain work packages under the Bridge Project were linked to the CIQ Project. GPSB has represented that they have applied for an extension of time ("EOT") to JKR but approval has as yet not been granted formally.

Credit risk is minimal, as the source of repayment hinges solely on the GOM. Additionally, note holders’ interests are further protected with the creation of a security account by GPSB to receive payments directly from the GOM, which shall then be used to solely repay Gerbang Perdana CIQ’s obligations due under the specific tranche of the MTNs.