MARC has removed its AIS rating on Matang Highway Sdn Bhd's (Matang) RM70.0 million Sukuk Musharakah (Sukuk) from MARCWatch Negative where it had been placed on December 13, 2010 to highlight a potential shortfall and departure from the scheduled build up of sinking fund. Matang is a wholly-owned single-purpose funding vehicle of Zecon Berhad (Zecon). Its payment obligations under the fully-amortising Sukuk are primarily funded by progress payments collected from JKR Sarawak under a turnkey contract to construct a highway linking Kuching City to the State of Sarawak's new Federal Administrative Center (Matang Route Project).

The MARCWatch resolution follows recent notification by the Sukuk trustee that Matang’s sinking fund account (SFA) and finance service reserve account (FSRA) were fully funded as at January 7, 2011 in relation to its forthcoming Sukuk redemption of RM15 million and RM0.4 million profit payment due May 27, 2011. The outlook on the AIS rating is stable pending the full redemption of the outstanding Sukuk on its maturity date, following which MARC will withdraw Matang’s Sukuk rating.

Contacts:
Sandeep Bhattacharya, +603-2082 2247 / sandeep@marc.com.my;
Khairul Emran Mahmud, +603-2082 2278 / emran@marc.com.my;
Ezien Hoo, +603-2082 2267 / ezien@marc.com.my.