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Saturday, 27 September 2008

MARC Reaffirms Ratings Of Dura Palms' Sukuk Ijarah

KUALA LUMPUR, Sept 16 (Bernama) -- The Malaysian Rating Corporation Bhd (MARC),has reaffirmed the ratings of Dura Palms Sdn Bhd's RM100 million series A, RM90 million series B and RM10 million series C Sukuk Ijarah at AAAIS, AAIS and AIS respectively.

The rating affirmation of series A and B Sukuk Ijarah are premised on the quality of the collateral and the structural protections incorporated in the transaction, it said in a statement today.

It also premised on the performance of the securitised estates buoyed by the strong crude palm oil prices backed by increasing demand and the prospective implementation of local and global biofuel programmes, it added.

In addition, MARC said sukuk holders benefit from the irrevocable undertaking provided by Teck Guan Holdings Sdn Bhd (TGHSB), to ensure that the obligations of sellers and issuers are met on a timely basis.

The rating reaffirmation of series C Sukuk reflects the stable credit rating of TGHSB.

Under the sale and lease back transaction, Dura Palms purchased beneficial rights to the oil palm plantation assets of TGHSB's units namely, Andum Sdn Bhd, Happy Valley Plantation Sdn Bhd and Teck Guan Plantations Sdn Bhd.

Dura Palms, a special purpose and wholly-owned subsidiary of TGHSB, subsequently leased the securitised assets back to the respective units under an Ijarah agreement.

TGHSB is an investment holding company with diversified operations, covering oil palm and cocoa plantation, oil palm milling, manufacturing, trading and others.

At maturity, MARC said the series A and B Sukuk totalling RM98 million will be funded via refinancing proceeds or those from the sale of the plantation properties representing an estimated 34.5 percent of the total market value of the securitised estates of RM283.9 million.

Series C Sukuk is structured with a single bullet maturity, falling after the maturity of series A and B Sukuk, it added.

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