Gerbang Perdana CIQ Sdn Bhd - 2009

MARC has affirmed the rating of Gerbang Perdana CIQ Sdn Bhd’s (GPCIQ) RM1.7 billion 7-year Medium Term Notes (MTN) Programme at AAA. The notes are fully collateralised by post-construction receivables of the Government of Malaysia (GOM) related to the construction of the integrated Customs, Immigration and Quarantine (CIQ) Complex project in Johor Bahru (JB). Accordingly, the affirmed rating essentially reflects the GOM’s creditworthiness and its capacity to make payment on Facility Payment Certificates (FPCs) which secure the MTNs. The FPCs represent unconditional and irrevocable obligation of the GOM. The rating carries a stable outlook.

GPCIQ, a wholly-owned subsidiary of Gerbang Perdana Sdn Bhd (GPSB), is a special-purpose vehicle incorporated to raise financing for the construction of the CIQ Complex project consisting of the CIQ Building, JB Sentral (a land transportation hub), a marine customs complex and several access roads linking the CIQ Complex to existing roads in the city. All MTNs issued by GPCIQ are backed by FPCs endorsed by the GOM upon acceptance of work done on the CIQ Complex project. The RM1.3 billion contract for the CIQ Complex project was awarded by the GOM to GPSB in April 2003 but has been revised following the cancellation of an important component of the development, the bridge project, to replace the existing causeway link to Singapore in 2006. This necessitated a reconfiguration of project specifications resulting in a shift in the original construction schedule which was further extended to end-July 2009 following delays in the relocation of Singapore’s Public Utility Board watermains at the JB Sentral area.

As at November 25, 2009, key components of the projects including CIQ Building, JB Sentral and the Short Term Access connecting the CIQ Building and the Johor Causeway have been completed with outstanding jobs remaining being the signalling and telecommunication works and a station yard which are now slated for completion by January 31, 2011. To finance the remaining construction works, the GOM (through the Ministry of Finance) has instructed GPCIQ to extend the drawdown availability period to November 8, 2011 from September 30, 2009 as well as extend the tenor of the MTN Programme by one year to November 9, 2012. MARC views the extension to the principal terms and conditions of the MTN Programme as rating-neutral as the drawdown-redemption mechanism and repayment terms remains unchanged.

GPCIQ has to date redeemed MTN Series 1, Series 2 and Series 3 amounting to RM340.0 million each with the next scheduled redemption of RM340 million due on November 9, 2010. As of November 11, 2009, MTNs outstanding under the programme amounts to RM458.5 million with remaining availability of RM221.5 million sufficient to finance the remaining works with a contract value of RM58.5 million.