MARC said in a statement the reaffirmation reflected the substantial locked-in sales from developments secured under the underwritten notes, which essentially acted to mitigate market risk.
“The rating is, however, moderated by delays in construction work and ultimately progress billings which affected its cash flow position,” the agency said.
The delays, which were triggered by the foreign labour repatriation in 2002, continued to persist going into 2003 as efforts to normalise construction works were hampered by industry-wide problems such as steel bar and sand shortages and adverse weather conditions, it said. – Bernama
“This is premised on the portfolio of hire-purchase receivables performing well within expectations, the availability of gross over-collateralisation of 107%, and a non-amortising cash reserve equivalent to 2.5% of the nominal value of the bonds,” the rating agency said in a statement.
Under the first of a two-tiered sale structure, Bumiputra-Commerce Finance Bhd (BCF), the primary seller, sold RM545mil principal value and related interest charges of hire-purchase receivables to a wholly owned subsidiary, IPrestige Sdn Bhd, the originator.
The receivables were transferred by way of an equitable assignment of the assets to the originator, while BCF continues to act as the servicer of the receivables under this transaction.
IPrestige then sold an undivided share of the principal portion of the hire-purchase receivables to the issuer, Auto ABS, a bankruptcy-remote special purpose company under the second tier. – Bernama
MARC said in a statement the reaffirmation reflected the substantial locked-in sales from developments secured under the underwritten notes, which essentially acted to mitigate market risk.
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