Friday, October 14, 2011

MARC affirms ratings of Kesturi highway's RM870m debt notes

KUALA LUMPUR: Malaysian Rating Corp Bhd (MARC) has affirmed the ratings on highway concessionaire Konsortium Lebuhraya Utara ' Timur (KL) Sdn Bhd's (Kesturi) debt notes totaling RM870 million.

MARC said on Friday, Oct 14 it affirmed the AA-IS rating on Kesturi's RM820 million sukuk musyarakah medium term notes programme (senior sukuk) and the A- rating on its RM50 million redeemable junior bonds (junior bonds.

'The ratings reflect adequate growth in vehicle traffic on the strategically located Duta ' Ulu Kelang (DUKE) highway which links the east and west parts of the Klang Valley, strong coverage of the company's debt obligations and the favourable terms of the issue structure which alleviate liquidity risks in the early years,' it said.

However, MARC said the ratings were moderated by the divergence between actual and forecast revenue and cash flow and increasing congestion along the highway's Mont Kiara exit ramp which may limit traffic growth.

The rating agency said the stable outlook reflected MARC's expectations that the project's credit metrics would remain adequate for the current ratings over the next 12 to 18 months.


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