MARC has placed its BBB+ rating on MK Land Holding Berhad’s (MK Land) RM300 million Serial Bonds Tranche 1 and Tranche 2 on MARCWatch Negative. The MARCWatch Negative placement of MK Land’s rating reflects liquidity concerns following MK Land’s announcement on May 2, 2008 that it is seeking the indulgence from bondholders of Tranche 1 and Tranche 2 bonds to defer future scheduled payments into the sinking fund account (SFA). MK Land is seeking to defer the payment of RM30 million into the SFA due on May 29, 2008 in respect of Tranche 1 bonds to August 25, 2008. It is also seeking to defer the payment of another RM30 million into the SFA due on June 13, 2008 in respect of the Tranche 2 bonds to June 13, 2009. MK Land is not seeking a deferment of the bond repayment dates.

The MARCWatch placement incorporates the potential of a more than one notch lowering of the rating if the requisite indulgence is not obtained and if MK Land is unable to identify the source of repayment for its Tranche 1 bonds due in August 25, 2008. In resolving the MARCWatch placement, MARC will monitor MK Land’s progress in its proceedings with the bondholders and will be meeting the management to discuss plans to alleviate its immediate liquidity situation and refinancing prospects.