MARC Assigns A+IS Preliminary Rating to Tan Chong Motor Holdings’ Proposed USD 358.8 Million Sukuk

Malaysian Rating Corporation (MARC) has assigned a preliminary rating of A+IS to Tan Chong Motor Holdings’ (TCMH) MYR 1.5 billion (USD 358.8 million) Islamic Medium-Term Notes (Sukuk Murabahah) Programme, with a Stable outlook. The rating is confined to a MYR 500 million (USD 119.6 million) issuance, with any further drawdown necessitating a reassessment of the rating.

Rating Rationale

The assigned rating reflects TCMH’s established presence in Malaysia’s automotive industry through its long-term collaboration with Japan-based Nissan Motor Corporation (Nissan), TCMH’s low-to-moderate leverage position, and potential growth from expansion into the Indochina region. However, the rating is constrained by thin operating margins, pa...