Gerbang Perdana CIQ Sdn Bhd - 2008 / 2009

MARC has affirmed the AAA rating of Gerbang Perdana CIQ Sdn Bhd’s (Gerbang Perdana CIQ) RM1.7 billion Seven Year Medium Term Notes (MTN) Programme. Gerbang Perdana CIQ, a special-purpose vehicle wholly-owned by Gerbang Perdana Sdn Bhd (GPSB), was incorporated to raise financing for its parent company in respect of a project to construct an Integrated Customs, Immigration and Quarantine Complex (CIQ Complex). The rating reflects the credit quality of construction receivables arising from Facility Payment Certificates (FPCs) issued in connection with the construction of the CIQ Complex as well as the satisfactory payment performance of the Government of Malaysia (GOM) to date. The FPCs represent unconditional and irrevocable obligations of the GOM. The rating carries a stable outlook.

GPSB was awarded the RM1.3 billion CIQ Complex Project by the GOM in April 2003. The original construction schedule of the CIQ Complex was rescheduled arising from the termination of the bridge project, which was to replace part of the existing causeway link between Johor Baru and Singapore. Sections 1, 2, 4 and 5 of the CIQ Complex have been successfully completed and operations commenced on December 1, 2008. However, completion of various other ancillary components of the CIQ Complex was extended to July 31, 2009 via Supplemental Contracts No. 4 and 5 executed between the GOM and GPSB on May 10, 2007 and July 23, 2008 respectively.

Following the extension of the completion dates, the noteholders approved the extension of the availability period of the MTN Programme from November 9, 2007 to December 31, 2008 with a further extension to September 30, 2009. MARC is of the view that the extensions would not expose the noteholders to any completion risk as all drawdowns from the MTN programme are backed by FPCs which evidences the completion of the construction work. Further, noteholders’ interests are protected from commingling risk by way of a designated account where all receipts from the GOM are deposited for the sole purpose of repaying obligations under the rated MTN Programme.
 
Gerbang Perdana CIQ has to date redeemed MTN Series 1 and Series 2 amounting to RM340.0 million each. The next scheduled redemption will be on November 9, 2009 for RM340 million. As of December 31, 2008, MTNs outstanding under the programme amount to RM765.8 million with remaining availability of RM254.2 million.