MARC has maintained a MARCWatch with negative outlook on the ratings of Peremba Jaya Holdings Sdn Bhd’s (PJHSB) RM200 million Murabahah Underwritten Notes Issuance Facility (MUNIF)/ Murabahah Medium-Term Notes (MMTNs). The rating action reflects PJHSB’s weak financials which remain unchanged since the initial issue of the MARCWatch in February 2006 and the continued uncertainty surrounding the finalisation of Contract D with Putrajaya Holdings Sdn Bhd (PjH). The long and short term ratings of PJHSB’s facility had in February 2006 been downgraded to A-_ID (A minus, Islamic Debt) and MARC-2_ID respectively and placed on MARCWatch with negative outlook.

PJHSB is currently the developer for Precinct 11, Putrajaya covering an area of 1,056 acres, being the largest residential zone in Putrajaya. To date, PJHSB has completed 2,096 residential units comprising 104 public units and 1,992 government quarters units under Contract A with PjH. It is currently developing another 1,850 units under Contracts B and C which were expected to be completed in 2005, but experienced delays in construction. Another 1,427 units of government quarters are to be developed under Contract D, which has not commenced construction as pricing negotiations are still continuing. Under the security arrangement, specific assignments of proceeds in respect of the government quarters contracts (for Contracts B, C and D) under Precinct 11 serve as the funding source for the redemption of the notes issued.

MARC will continue to monitor the developments affecting PJHSB and advise any rating implications in due course.