MARC has downgraded the rating of Aegis One Berhad’s (Aegis One) RM100.0 million subordinated secured bonds to D from B to reflect Aegis One’s failure to make ultimate payment of principal on the RM100.0 million subordinated secured bonds by its extended maturity date of December 2007. Aegis One had earlier, redeemed in full its RM900.0 million senior secured bonds in November 2007.

As of 25 January 2008, 35.5% of the outstanding subordinated bonds have been redeemed with approximately RM7.0 million expected to be recovered by end-March 2008 from a defaulted obligor. Legal actions have been initiated against the defaulted obligors and negotiations are ongoing.

Aegis One is a bankruptcy remote special-purpose company incorporated in Malaysia to undertake the primary collateralised loan obligation (CLO) transaction which closed in November 2002. Following the rating downgrade to D, MARC no longer has a surveillance obligation in respect of the subordinated bonds.