MARC has placed the B- ID long-term rating of Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd’s (SILK) Notional Amount of RM2.01 billion Al-Bai Bithaman Ajil Islamic Debt Issuance Facility (ABBA) (2001/2021) on MARCWatch Negative.

The MARCWatch placement follows confirmation from PB Trustee Services Sdn Bhd (the Trustee) dated 3 May 2007 that SILK had failed the Annual Debt Service Cover Ratio (DSCR) test of 1.25:1 as at 28 February 2007. SILK has, accordingly, sought indulgence from the Trustee until 31 May 2007 to allow more time for all parties involved in a proposed restructuring plan to reach agreement.

Resolution of the MARCWatch placement is conditioned on the company’s restructuring plan. MARC will continue to monitor the progress of the restructuring initiatives. The rating on SILK could be lowered further if no refinancing is implemented in the next few months. The first repayment of the facility, amounting to RM150 million, is scheduled on 22 August 2007.