MARC Downgrades MEX II’s MYR 1.3 Billion Sukuk Murabahah to BB-IS; Maintains MARCWatch Negative Placement

Malaysian Rating Corporation (MARC) has downgraded MEX II’s MYR 1.3 billion Sukuk Murabahah Programme (Sukuk Murabahah) rating to BB-IS from BBB-IS, and its MYR 150 million Junior Bonds to B from BB, while maintaining the ratings on MARCWatch Negative.

MARC’s downgrade on the ratings is based on the rising likelihood that MEX II will be unable to establish a liquidity facility that it was originally expected to obtain by end of 2020 to meet a principal and profit payment of MYR 68.7 million due in April 2021. Although MEX II is still negotiating to obtain financial assistance, MARC noted that the company’s liquidity had worsened to the point that has raised the default risk without external cash support or maturity extensions. Furthermore, MEX II has to repay...