Alpha Circle Receives a Ratings Downgrade on its Sukuk Musharakah from MARC; Outlook Negative

The Malaysian Rating Corporation (MARC) has downgraded Alpha Circle’s MYR 160 million Senior Sukuk Musharakah to AIS from AA-IS, whilst the MYR 55 million Junior Sukuk Musharakah has been lowered to BBBIs from AIS. The ratings outlook is Negative. Alpha Circle is the funding vehicle of NERS, with a 12-year government contract until May 2023.

The downgrade results from issues pertaining to the management of the foreign labour force amidst COVID-19 and related border closures, which has affected new foreign labour recruitment and led to administrative delays with respect to permit renewals for existing foreign workers.

These factors have collectively led to lower-than-estimated levels of cash flow to Alpha Circle. As a result, Alpha Circle has not been able to mee...