MARC has issued this clarification following an announcement on Bank Negara Malaysia’s FAST system yesterday that PSSB Ship Management Sdn Bhd (PSM) had missed its June 15, 2009 profit payment on its RM40 million Bai Bithaman Ajil Islamic Securities (BAIS).  Today, MARC received confirmation from the facility agent of the BAIS, Kenanga Investment Bank Bhd, that PSM had made two separate cash payments for the full amount of the profit payment due yesterday but there had been a delay in the clearing of the funds which resulted in the BAIS holders receiving the profit payment a day later.

MARC’s rating on PSM’s BAIS remains at BB-ID with negative outlook where it had been lowered to from BBB-ID in November 2008.  The rating continues to reflect its continuing failure to rectify covenant breaches, particularly in relation to the provision of audited accounts, and its non-compliance with respect to the required minimum balance to be maintained in its Debt Service Reserve Account. Since MARC’s last rating action, PSM’s cash and borrowing availability and current liquidity position remain indeterminable.

PSM is a special purpose funding vehicle established by its holding company, PSSB Strategic Holdings Sdn Bhd (PSSB), to issue the BAIS which will be repaid from annual rental proceeds of RM8.8 million due from the government under a 10-year  time charter of its vessel, currently deployed under the Royal Malaysian Navy’s training programme. The time charter ends in 2010, a year before the final BAIS redemption date in December 2011.

Contacts:
Hafizan Haron 03-2090 2238/ hafizan@marc.com.my,
Lee Mei Lin, 03-2090 2259/ meilin@marc.com.my