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

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

Rating Downgrade Rationale

MARC’s downgrade on the ratings is driven by liquidity pressure that the company is facing and the likelihood that MEX II will miss an upcoming Sukuk repayment of MYR 68.7 million which is due on the 29th of April 2021. Furthermore, MEX II has to repay upcoming obligations of MYR 38.2 million in October 2021, while its cash reserves stand at MYR 7.7 million as of February 2021.

MEX II is in discussions with financial institutions to obtain a bridge facility to meet...