MARC is placing the following ratings on Sunrise Berhad (Sunrise) and Horizon Hills Development Sdn Bhd (Horizon Hills) on MARCWatch Developing following a conditional takeover bid for Sunrise by UEM Land Holdings Berhad (UEM Land):

1. Sunrise's A+ID rating on its RM400 million Islamic Medium Term Notes (IMTN) Programme; and
2. Horizon Hills' MARC-1ID(s) rating on its RM70 million Islamic Commercial Paper (ICP) Programme. Horizon Hills is a 50:50 joint venture between Gamuda Berhad (Gamuda) and UEM Land.

Concurrently, MARC has affirmed its AAAID(bg) rating on Horizon Hills' RM200 million Islamic Bank Guaranteed Medium Term Notes (IMTN) Programme. The rating on the IMTN continues to reflect the credit enhancement stemming from an unconditional and irrevocable guarantee by Public Bank Berhad (rated AAA/Stable on the basis of public information).

MARC is reviewing the impact of the takeover bid on Sunrise's rated debt. The agency is concurrently reviewing its public information corporate credit rating on UEM Land to assess the impact of its takeover bid on its credit quality and the potential rating implications for credit support extended to Horizon Hills' ICP. The rating on Horizon Hills' ICP is based on the credit strength of Gamuda and UEM Land, both of which have provided unconditional and irrevocable undertakings in proportion to the size of their shareholdings to meet obligations under the ICP.

As Sunrise is currently rated lower than UEM Land's unannounced corporate credit rating, a successful acquisition could result in the existing rating on Sunrise's debt issue being raised or left unchanged. The takeover could have credit implications for the post-acquisition credit profile of UEM Land based on the final form of consideration received by Sunrise's shareholders. UEM Land proposes to satisfy the acquisition cost of Sunrise's ordinary equity either through the issuance of new ordinary shares or redeemable convertible preference shares. While the impact of the takeover on the financial profile of UEM Land is less clear, MARC believes that the takeover is likely to result in an enhanced business position for UEM Land. The agency also believes that the takeover could pose meaningful integration risks.

MARC will closely monitor developments on the takeover and will take the appropriate rating action when the takeover is resolved. UEM Land expects to conclude the takeover by the first quarter of 2011.

Contacts:
Benjamin Yab 03-2082 2270 / benjaminyab@marc.com.my;
Nisha Fernandez 03-2082 2269/ nisha@marc.com.my;
Rajan Paramesran 03-2082 2233/ rajan@marc.com.my.