KUAL ALUMPUR: RAM Ratings has reaffirmed the enhanced AAA(bg)/P1(bg) ratings of E&O Property (Penang) Sdn Bhd's (EOPP) RM350 million bank-guaranteed Commercial Papers/Medium-Term Notes Programme (CP/MTN) with a stable outlook.
The enhanced long-term rating reflects the unconditional and irrevocable bank guarantee extended by Malayan Banking Berhad (Maybank) (rated AAA/Stable/P1 by RAM Ratings) while the enhanced short-term rating reflects the unconditional and irrevocable bank guarantee extended by Maybank and Affin Bank Berhad (rated A1/Stable/P1 by RAM Ratings), it said.
In a statement Tuesday, June 21 RAM Ratings said the backing of the bank guarantee enhances the credit profile of the CP/MTN beyond EOPP's stand-alone credit standing.
EOPP is the developer of Phase 1 of the Seri Tanjung Pinang project (the Project) - a mixed development spanning 240 acres of reclaimed land in Tanjung Tokong, Penang, with a gross development value of approximately RM3.6 billion.
EOPP is 95.6%-held by E&O Property Development Bhd, which is in turn a wholly owned subsidiary of Eastern & Oriental Bhd.
RAM Ratings said that as at Feb 8, 2011, EOPP had sold more than RM1.36 billion of PROPERTIES [] since its maiden launch in October 2005; about RM332.06 million remained unbilled.
Excluding the bank guarantee, EOPP's credit fundamentals are supported by its parent's established track record and strong branding, said the rating agency.
'This, coupled with the project's mature status and its strategic location i.e. close proximity to Gurney Drive are expected to augur well for EOPP. As EOPP is an integral part of the group, we believe it will continue to enjoy strong parental support.
'These factors are balanced against the company's single-project risk and heavy debt load against the backdrop of intense competitive pressures,' it said.
The enhanced long-term rating reflects the unconditional and irrevocable bank guarantee extended by Malayan Banking Berhad (Maybank) (rated AAA/Stable/P1 by RAM Ratings) while the enhanced short-term rating reflects the unconditional and irrevocable bank guarantee extended by Maybank and Affin Bank Berhad (rated A1/Stable/P1 by RAM Ratings), it said.
In a statement Tuesday, June 21 RAM Ratings said the backing of the bank guarantee enhances the credit profile of the CP/MTN beyond EOPP's stand-alone credit standing.
EOPP is the developer of Phase 1 of the Seri Tanjung Pinang project (the Project) - a mixed development spanning 240 acres of reclaimed land in Tanjung Tokong, Penang, with a gross development value of approximately RM3.6 billion.
EOPP is 95.6%-held by E&O Property Development Bhd, which is in turn a wholly owned subsidiary of Eastern & Oriental Bhd.
RAM Ratings said that as at Feb 8, 2011, EOPP had sold more than RM1.36 billion of PROPERTIES [] since its maiden launch in October 2005; about RM332.06 million remained unbilled.
Excluding the bank guarantee, EOPP's credit fundamentals are supported by its parent's established track record and strong branding, said the rating agency.
'This, coupled with the project's mature status and its strategic location i.e. close proximity to Gurney Drive are expected to augur well for EOPP. As EOPP is an integral part of the group, we believe it will continue to enjoy strong parental support.
'These factors are balanced against the company's single-project risk and heavy debt load against the backdrop of intense competitive pressures,' it said.
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