MARC PLACES MTD INFRAPERDANA BHD'S RM700 MILLION ISLAMIC MEDIUM TERM NOTES PROGRAMME RATING OF AAID ON MARCWATCH DEVELOPING

Aug 22, 2011 -
MARC has placed its AAID long-term rating on MTD InfraPerdana Bhd’s (MTD InfraPerdana) RM700.0 million Islamic Medium Term Notes (IMTN) Programme on MARCWatch Developing. The MARCWatch placement follows recent developments pertaining to the group’s toll road concessions, the proposed sale of the concession assets to related parties and retirement of its existing debt.



MTD InfraPerdana, which is wholly-owned by MTD Capital Bhd (MTD Capital), holds the concession for the Kuala Lumpur – Karak Highway (KL-Karak), the East Coast Expressway Phase 1 (ECE1), the East-West Link Expressway (EWL) and the Kuala Lumpur – Seremban Expressway (KL-Seremban) through its wholly-owned subsidiaries, MTD Prime Sdn Bhd (MTD Prime) and Metramac Sdn Bhd (Metramac). On January 28, 2011, the government announced a freeze on toll rate increases for the KL-Karak and ECE1 until January 1, 2015 and the early termination of the EWL concession on May 15, 2011. MARC expects cash flow coverage for the debt metrics to deteriorate as a result of the reduced toll revenues based on its preliminary analysis of the credit impact of the toll rate freeze and the early termination of the EWL concession. This is, however, not expected to result in MTD InfraPerdana’s credit metrics falling out of line with the current issue rating.

Of more immediate concern and greater credit implication to MARC is the proposed acquisition of the entire business and undertaking of MTD Prime and Metramac for RM3.525 billion cash by MTD Capital’s group executive chairman and its president/CEO through a special purpose vehicle. MTD InfraPerdana is expected to retire all of the outstanding notes issued under the rated facility upon completion of the asset disposal.

MARC will continue to monitor developments relating to the corporate exercise and comment as more information becomes available.

Contacts:
Sandeep Bhattacharya, +603-2082 2247/ sandeep@marc.com.my;
Jason Kok, +603-2082 2258/ jason@marc.com.my.