MARC has placed its A+ID rating on PSSB Ship Management Sdn Bhd’s RM40.0 million Bai Bithaman Ajil Islamic Securities (“BAIS”) on MARCWatch Negative. The MARCWatch placement follows the trustee’s confirmation of breaches in covenants of the BAIS including PSM’s failure to remit scheduled payments into the Debt Service Reserve Account. In addition, PSM has also failed to furnish the required semi annual and annual audited accounts, quarterly budget on its operation and confirmation on the Debt Service Cover Ratio as stipulated in the trust deed of the BAIS dated 7 December 2004. PSM is a special purpose funding vehicle established by PSSB Strategic Holdings Sdn Bhd to issue the BAIS. The Islamic securities will be repaid from 10-year annual payments under the time charter of a vessel to the Government for the Royal Malaysian Navy’s training programme.

MARC is closely monitoring PSM’s developments and will disseminate any rating implications arising therefrom accordingly.