MARC has revised its MARCWatch placement on Ingress Sukuk Berhad’s (Ingress or the company) RM160  million Sukuk Al Ijarah Issuance to MARCWatch Negative from Developing following Ingress’ failure to rectify the breach in certain financial covenants under the Ijarah Agreement. MARC has been informed by Ingress that the remedy period granted by the Sukukholders up to July 26, 2008 has not been further extended and the company has yet to conclude a refinancing scheme in relation to the Sukuk. MARC understands that Ingress has sought a further three-month extension from the Sukukholders to resolve the breach under the Ijarah Agreement.

The rating action highlights increasing downgrade momentum in light of heightened credit risk on the part of Ingress to meet the potential accelerated repayment of the Sukuk in the event the extension is not granted by the Sukukholders and/or continued delay in executing the Sukuk refinancing scheme.

MARC is closely monitoring the developments of the above and will update its impact on the rating accordingly.