MARC places the rating of Bumiputera-Commerce Holdings Bhd.’s (“BCHB”) RM250 million Redeemable Unsecured Bonds (2001/2008) on MARCWatch with positive outlook pursuant to BCHB’s disposals of equity interests in Commerce Life Assurance Bhd. (“CLAB”), Commerce Takaful Bhd. (“CTB”) and Commerce Assurance Bhd. (CAB”).

BCHB announced on 4 January 2007 that it will be disposing 49% of its equity interests in CLAB and CTB to AVIVA Asia Pte. Ltd. (“AVIVA”) and its entire equity interest in CAB to Allianz Group (“Allianz”) for a total consideration of RM990 million. BCHB will still retain 51% equity interests in CLAB and CTB. The disposals, subject to regulatory approval, are expected to be completed by the second quarter of this year and are estimated to contribute approximately RM650 million to the group’s bottom line.

MARC views the disposals as positive. Proceeds from the disposals are expected to be used to pare down the debt levels of BCHB. Although it is exiting the general insurance business, BCHB’s subsidiary, CIMB Bank will be distributing CAB’s products adding to its fee income potential. CIMB Bank will also be entering into bancassurance agreements with CLAB and CTB for the distribution of their respective products. The disposals and simultaneous distribution agreements will allow the parties involved to leverage their respective strengths; CIMB Bank’s strong distribution capabilities via its large branch footprint and 4.5 million customers, and, AVIVA’s and Allianz’s expertise and established brands.

MARC is currently undertaking a rating review of BCHB’s Redeemable Unsecured Bonds and will disseminate its rating review decision in due course. The current rating on BCHB’s Redeemable Unsecured Bonds (2001/2008) is A+.