MARC has reaffirmed the rating of Europlus Corporation Sdn Bhd’s (ECSB) RM350 million Murabahah Underwritten Notes Issuance Facility (MUNIF) at MARC-3ID. The reaffirmation reflects the substantial locked-in sales from developments secured under the MUNIF which essentially acts to mitigate market risk. The rating is, however, moderated by delays in construction work and ultimately progress billings which affected its cash flow position. The delays which were triggered by the foreign labour repatriation exercise in 2002 continued to persist going into 2003 as efforts to normalise construction works were hampered by industry-wide problems such as steel bar and sand shortages and adverse weather conditions. Delays in obtaining regulatory approval at the vacant possession stage for several developments further exacerbated the delays in cash inflows. It is on these premises that MARC has placed the rating on a negative outlook. This rating action follows the difficulties faced by ECSB in meeting scheduled SFA payments, resulting in the restructuring of the MUNIF’s SFA payment schedule duly approved by the Bondholders.