MARC DOWNGRADES TRINITY CORPORATION BERHAD’S (FORMERLY KNOWN AS TALAM CORPORATION BERHAD) SETTLEMENT BaIDS TO B-ID ; OUTLOOK NEGATIVE

Dec 3, 2012 -

MARC has removed its rating on Trinity Corporation Berhad’s (Trinity) outstanding RM93.9 million Settlement Bithaman Ajil Debt Securities (Settlement BaIDS) from MARCWatch Negative and concurrently downgraded the rating to B-ID from B+ID. The lowering of the rating reflects continuing uncertainty related to unresolved cross-default issues at the property developer which places the Settlement BaIDS at an increased risk of an acceleration. The outlook on the rating is negative.

MARC first placed Trinity’s Settlement BaIDS rating on MARCWatch Negative on May 25, 2012 following wholly-owned subsidiary Ample Zone Sdn Bhd’s (Ample Zone) default on its RM84.7 million Sukuk Ijarah obligations.

MARC notes that the Ample Zone’s sukukholders have held off declaring an event of default (EOD) as of to date and have granted Ample Zone a further indulgence until March 31, 2013 subject to the fulfillment of some conditions. MARC understands that sukukholders had earlier given Ample Zone until September 30, 2012 to meet these conditions and is concerned with the lack of progress shown by Ample Zone in meeting the conditions imposed by its sukukholders.

MARC will revise the rating outlook to stable if Ample Zone is able to avoid an EOD declaration and Trinity is able to fully mitigate its acceleration risk as a result. The negative outlook reflects the risk of further downward movement in the rating in the event that Ample Zone’s sukukholders declare an EOD, and Trinity’s Settlement BaIDS is subject to acceleration without the liquidity to fund the acceleration.

 

Contacts:

Taufiq Kamal, +603-2082 2251/ taufiq@marc.com.my;

Rajan Paramesran, +603-2082 2233, rajan@marc.com.my.