Wednesday, Jun 08, 2005
MARC has downgraded the long-term ratings of Ambang Sentosa Sdn. Bhd.’s (ASSB) RM372 million and RM226 million of class B and class C Al-Bai Bithaman Ajil Islamic debt (BaIDS) asset-backed securities (ABS) facility with a developing outlook. The downgrades are premised on the construction delays experienced on the Taman Puncak Jalil development brought about by the repatriation of illegal foreign workers in the last quarter of 2004 which resulted in a significant reduction in total workforce up to the date of review; building material shortages, such as, steelbar and sand; and Federal Government’s concern over hill slope development in the second half of 2004. The construction delay has resulted in significantly lower progress receipts with the BaIDS redemption account balance amounting to approximately RM94.34 million as at 30 April 2005, significantly lower than the original projections.
ASSB will be seeking bondholders’ approval to restructure the Class B and Class C BaIDS including extending the remaining tenures of Class B and C BaIDS by another year and substituting properties within the asset portfolio. The restructuring will enable ASSB to accumulate progress receipt payments from end-financiers as the originator, Maxisegar Sdn. Bhd. (Maxisegar) completes the construction works. IJM Construction Sdn. Bhd (IJM) was recently appointed as the construction manager for the Taman Puncak Jalil development which is a positive development as Maxisegar will benefit from IJM’s experience. MARC will monitor the outcome of the proposed bondholders’ meeting to determine further effect, if any, on the ratings.
As at 30 April 2005, overall status of completion for Taman Puncak Jalil is 58.8% whilst the Saujana Damansara is 100% complete. Based on revised cashflow projections, Taman Puncak Jalil will achieve 93.0% overall completion by 31 December 2006 with the remaining phases to be completed before June 2007. The remaining construction cost will be funded by RM63.18 million from Escrow Account 1. Cash reserves in Escrow Account 2 and 3 amounting to RM17.92 million and RM6.79 million respectively, provide additional credit and liquidity protection to bondholders.
ASSB will be seeking bondholders’ approval to restructure the Class B and Class C BaIDS including extending the remaining tenures of Class B and C BaIDS by another year and substituting properties within the asset portfolio. The restructuring will enable ASSB to accumulate progress receipt payments from end-financiers as the originator, Maxisegar Sdn. Bhd. (Maxisegar) completes the construction works. IJM Construction Sdn. Bhd (IJM) was recently appointed as the construction manager for the Taman Puncak Jalil development which is a positive development as Maxisegar will benefit from IJM’s experience. MARC will monitor the outcome of the proposed bondholders’ meeting to determine further effect, if any, on the ratings.
As at 30 April 2005, overall status of completion for Taman Puncak Jalil is 58.8% whilst the Saujana Damansara is 100% complete. Based on revised cashflow projections, Taman Puncak Jalil will achieve 93.0% overall completion by 31 December 2006 with the remaining phases to be completed before June 2007. The remaining construction cost will be funded by RM63.18 million from Escrow Account 1. Cash reserves in Escrow Account 2 and 3 amounting to RM17.92 million and RM6.79 million respectively, provide additional credit and liquidity protection to bondholders.