MARC has maintained its AA-_IS rating on MMC Corporation Berhad’s (MMC) Sukuk Murabahah (Sukuk Murabahah) Programme following an upsize of the programme limit to RM2.5 billion from the original RM1.5 billion. The outlook on the rating is stable.

MARC views that as the proceeds from the additional RM1.0 billion Sukuk Murabahah will be wholly utilised to redeem an existing term loan facility, there is minimal impact on MMC’s credit profile and in particular, its gearing level. MMC’s consolidated group borrowings is expected to remain at about RM9.0 billion, with the debt-to-equity (DE) ratio remaining at about 0.86 times (net DE: 0.76 times). The rating agency notes the refinancing will extend the group’s debt maturity profile to provide a better match against its future cash flows.

The rating is underpinned by MMC’s strong competitive position in port operations, engineering and construction, as well as power generation, all of which are well supported by long-term concessions and sizeable government-related infrastructure contracts. The group’s moderately high leverage position and its sizeable planned capex requirement remain moderating rating factors.

Full details on the rating have been provided in MMC’s Credit Analysis Report published on January 29, 2018 which is available on MARC’s website at www.marconline.com.my.

Contacts:
Saifuruddin Othman, +603-2717 2945 / saifuruddin@marc.com.my;
Taufiq Kamal, +603-2717 2951 / taufiq@marc.com.my.