MARC has downgraded Jana Niaga Sdn Bhd’s (“JNSB”) RM100.0 million Murabahah Underwritten Notes Issuance Facility (“MUNIF”) from MARC-3 ID  to MARC-4 ID  following the failure of University Industri Selangor (“UNISEL”) to make good outstanding guaranteed rental payments amounting to RM8.7 million (as at October 2006) by 31 January 2007. In December 2006, the rating was placed on MARCWatch Developing when JNSB received written confirmation from UNISEL that all outstanding guaranteed rental payments will be paid by 31 January 2007, with downgrade implications if payment was not received by the appointed date. MARC revised JNSB’s MUNIF from MARCWatch Developing to MARCWatch Negative following an announcement in December 2006 by Abrar Discount Berhad (“ABRAR”), the sole note holder and underwriter for the facility, of its intention to cease operations. However, MARC understands from ABRAR that the cessation would not have an impact on the roll over of the MUNIF in the near term.

The MUNIF had been downgraded in May 2006 from MARC-2 ID to MARC-3ID following JNSB’s deteriorating cash flow position arising from the failure of UNISEL to meet guaranteed rental payments.
 
JNSB has represented that UNISEL will repay all outstanding guaranteed rental payments once they have obtained final approval for the disbursement of the loan granted by Affin Investment Bank. The timing of the loan disbursement however remains obscure.