MARC: MEX II’s sukuk, junior bonds at risk for imminent default

KUALA LUMPUR: Tolled-road concessionaire MEX II Sdn Bhd’s sukuk and junior bonds remain at risk for imminent default as liquidity remains severely strained and there is no headway yet to revamp its financial obligations.

Malaysian Rating Corporation (MARC) has highlighted MEX II’s RM1.3bil sukuk murabahah programme and RM150mil junior bonds which carry ratings of CIS/C remain at risk due to looming repayment ahead.

“We note that the liquidity remains severely strained and understand that no material progress has been made on a planned restructuring of its financial obligations.

“MEX II faces a looming repayment of around RM68.7mil on Aug 27, 2021, followed by a further RM38.2mil on Oct 29, 2021. It had reported cash of just about RM7.8mil in its finance service reserve account at end-May 2021,” it said.

MARC believes the financial market conditions remain challenging for MEX II to be able to raise capital in time to repay the upcoming sukuk maturities.

“As such, the ratings will be downgraded to 'D' on missed payment on Aug 27, 2021,” it said.

The Lebuhraya Putrajaya-KLIA (MEX II) is an 18km, three-lane dual carriageway that starts at Putrajaya Interchange and merge onto the existing Lebuhraya KLIA (FT26) in Sepang.

In February, MARC downgraded its ratings on MEX II’s sukuk and junior bonds due to uncertainty of it securing additional funding.

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