MARC has lifted its MARCWatch Developing placement on Equine Capital Berhad (Equine Capital)’s ratings of A-/MARC-2 of up to RM95 million Commercial Papers/Medium Term Notes (“CP/MTN”).

The original MARCWatch placement was made following confirmation from the issue’s trustee that a breach in the Debt Service Coverage Ratio (“DSCR”) had occurred as at March 31, 2006. The confirmation from the trustee came a year after the occurrence of the violation, and effectively negated an earlier statement on financial covenant compliance provided to MARC in July 2006.

The MARCWatch was extended further in July 2007 pending the finalisation of the audited report for FY2007 and the release of the statement on the financial covenant which was unavailable at the date of the press announcement.

The lifting of the MARCWatch comes after written confirmation by the auditors in respect of the Debt Service Cover Ratio (“DSCR”) calculation as at March 31, 2007. Equine Capital’s DSCR stood at 1.85 times above the covenanted level of 1.75 times under the trust deed. With this, the group has rectified its covenant violation as at March 31, 2006.