MARC Affirms BBB-IS Rating on Senai-Desaru Expressway’s MYR 1.89 Billion Sukuk; Outlook Revised to Negative

Malaysian Rating Corporation (MARC) has affirmed the BBB-is rating of Senai-Desaru Expressway Berhad’s (SDEB) MYR 1.89 billion Islamic Medium-Term Notes Programme (Restructured Sukuk), while revising the Outlook to Negative from Stable. SDEB is the concessionaire of the 77-kilometre Senai-Desaru Expressway (SDE) in Johor, which links the towns of Senai and Desaru with a connecting highway to Pasir Gudang.

Ratings Rationale

The affirmation of the rating is based on SDEB’s sufficient near-term liquidity and the accommodative amortization schedule of the Restructured Sukuk, which includes a step-up profit feature that provides the company leeway to strengthen cash reserves, boost liquidity, as well as comply with the 1.25 times covenanted fina...