KUALA LUMPUR: BERJAYA CORPORATION BHD []'s BerjayaCity Sdn Bhd (BCity) has proposed to issue RM150 million Danajamin-guaranteed medium-term notes (MTN) of up to 10 years.
RAM Rating Services Bhd had on Tuesday, July 27 assigned an enhanced rating of AAA(fg) to BCity's proposed RM150 million Danajamin-guaranteed MTN with a stable outlook.
The enhanced rating reflects the irrevocable and unconditional financial guarantee by Danajamin Nasional Bhd (Danajamin); the financial enhancement ratings of AAA/P1 were assigned by RAM Ratings in May, 2009.
"The backing of the financial guarantee enhances the credit profile of the proposed MTN beyond BerjayaCity's stand-alone credit risk. Under this structure, all risks associated with the proposed MTN are expected to be absorbed by Danajamin," said the ratings agency.
BCity is involved in oil-palm PLANTATION []s but its property development and property investment activitieshave been largely dormant.
BCity is a small player within the oil-palm plantation industry, with 4,778 hectares of planted land. In the past few years, the company has been recording fresh fruit bunches (FFB) yields of above 20 tonnes per mature ha, slightly higher than the industry average.
However, its FFB yields will likely decline somewhat over the next few years due to its scheduled replanting programme that will cover 1,677 ha of its estates (between 2011 and 2014).
As at end-April 2010, BCity's gearing ratio stood at a high 2.15 times; its gearing ratio is anticipated to remain high with the drawdown of the MTN for refinancing and replanting purposes.
BCity derives financial flexibility from the support of its ultimate parent, BCorp, which has extended financial backing to the company in the past and has also provided a corporate guarantee to Danajamin on the proposed MTN. As at end-April 2010, advances from BCorp totalled RM175.06 million.
RAM Rating Services Bhd had on Tuesday, July 27 assigned an enhanced rating of AAA(fg) to BCity's proposed RM150 million Danajamin-guaranteed MTN with a stable outlook.
The enhanced rating reflects the irrevocable and unconditional financial guarantee by Danajamin Nasional Bhd (Danajamin); the financial enhancement ratings of AAA/P1 were assigned by RAM Ratings in May, 2009.
"The backing of the financial guarantee enhances the credit profile of the proposed MTN beyond BerjayaCity's stand-alone credit risk. Under this structure, all risks associated with the proposed MTN are expected to be absorbed by Danajamin," said the ratings agency.
BCity is involved in oil-palm PLANTATION []s but its property development and property investment activitieshave been largely dormant.
BCity is a small player within the oil-palm plantation industry, with 4,778 hectares of planted land. In the past few years, the company has been recording fresh fruit bunches (FFB) yields of above 20 tonnes per mature ha, slightly higher than the industry average.
However, its FFB yields will likely decline somewhat over the next few years due to its scheduled replanting programme that will cover 1,677 ha of its estates (between 2011 and 2014).
As at end-April 2010, BCity's gearing ratio stood at a high 2.15 times; its gearing ratio is anticipated to remain high with the drawdown of the MTN for refinancing and replanting purposes.
BCity derives financial flexibility from the support of its ultimate parent, BCorp, which has extended financial backing to the company in the past and has also provided a corporate guarantee to Danajamin on the proposed MTN. As at end-April 2010, advances from BCorp totalled RM175.06 million.
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