MARC has downgraded Serba Dinamik Holdings Berhad’s Islamic Medium-Term Notes Programme (IMTN) rating to C_IS from BB_IS/Negative. Serba Dinamik’s Islamic Commercial Papers (ICP) rating remains at MARC-4_IS which is the lowest category under the non-investment grade, reflecting the heightened risk of non-repayment on the outstanding RM100 million ICP.

MARC’s downgrade action is premised on the missed semi-annual coupon payment of USD7 million on the outstanding USD222 million senior sukuk issued by Serba Dinamik’s wholly-owned indirect subsidiary, SD International Sukuk Ltd. The coupon payment was due on November 9, 2021 and the company confirmed that no payment was made during the 30-day grace period which ended on December 9, 2021. 

As a result of this default, there is now an increasing likelihood of a cross default trigger under the IMTN/ICP programmes. Should sukukholders declare an event of default, the ratings of both programmes will be downgraded to D_IS. 

Neo Xue Wei, +603-2717 2937/ xuewei@marc.com.my;

Sharidan Salleh, +603-2717 2954/ sharidan@marc.com.my.