Gerbang Perdana CIQ Sdn Bhd - 2012 Credit Commentary Report

MARC has affirmed the rating of Gerbang Perdana CIQ Sdn Bhd’s (GPCIQ) RM1.7 billion Medium Term Notes (MTN) programme at AAA with a stable outlook. The rating action affects RM14.7 million of outstanding notes under the programme. The notes are backed by facility payment certificates (FPC) issued by the Government of Malaysia (GoM) with a very strong collection history. The FPCs represent the explicit, irrevocable and unconditional obligation of the GoM to pay the stipulated amount as per the FPC in a timely manner. Accordingly, the ‘AAA’ rating incorporates the credit strengths of the GoM. The FPCs were issued based on approved and completed construction works under the Gerbang Selatan Bersepadu project (CIQ project) in Johor Bahru. Construction works commenced in January 2003 and were fully completed in November 2011.

The CIQ project comprises two key buildings and infrastructure works in Johor Bahru: the main CIQ complex (renamed Bangunan Sultan Iskandar) and the road links to the city and JB Sentral; and a marine customs complex in Tanjung Surat. The issuing entity, GPCIQ, is a special purpose vehicle set up by the project’s turnkey contractor and GPCIQ’s sole shareholder Gerbang Perdana Sdn Bhd for the purpose of raising funds for the implementation of the RM1.3 billion CIQ project. With the full completion of the project, final FPCs have been issued which are due for payment on the maturity date of the notes, as with prior FPCs and the corresponding redemption notes.

MARC will withdraw its rating on the MTN Programme upon full redemption of the notes on November 9, 2012.