MARC has placed its MARC-1(bg)/A(bg)  rating on CNLT (FAR EAST) Berhad’s RM60 million Bank Guaranteed Commercial Papers/Medium Term Notes on MARCWatch Developing. The MARCWatch placement follows CNLT’s confirmation that it failed to honour its first scheduled repayment of RM15 million under its bank guaranteed CP/MTN programme, which was due on 10 April 2007.

Notwithstanding the recourse that noteholders and bondholders have to the bank guarantors in an event of default, the note holders have approved CNLT’s restructuring plan which defers the scheduled redemption of the bonds from year 2007 through 2010 (RM 15 million per annum) to a bullet repayment of RM60 million in year 2010.

MARC will continue to closely monitor further developments and consequently the implications on the ratings of CNLT (Far East) Berhad. The ratings will remain on MARCWatch Developing pending the provision of additional information and detailed discussion with management in the very near future.