KUALA LUMPUR: MARC Ratings has removed YNH Property Bhd
’s Islamic Medium-Term Notes Programme (Sukuk Wakalah) rating from MARCWatch Negative placement and concurrently downgraded the rating to BBIS.
“The rating had been on negative watch since Jan 18, 2024, precipitated by YNH’s weak financial position, delayed asset disposals and material issues concerning its key shareholder that have compounded the challenges the group has been facing to address its weakening credit profile,” MARC said in a statement.
Since the negative rating in January, the rating agency noted that YNH has not shown any meaningful progress in addressing concerns about meeting its upcoming financial obligations.
YNH has an outstanding RM323mil under the IMTN programme, of which the first tranche of RM153mil will mature on Feb 28, 2025.
It is required to build up 50% of this amount through monthly payments of RM6.1mil into a reserve account from Feb 28, 2024, onwards.
However, YNH has found it challenging to meet this financial commitment, periodically lapsing into technical defaults, underscoring its weak liquidity position. Cash and short-term deposits stood at about RM13mil while total group borrowings stood at RM1.2bil as at March 31, 2024.
“MARC Ratings’ rating action to downgrade YNH’s rating to BBIS upon removing it from negative watch reflects heightening concerns over the group’s business and financial prospects. The rating outlook is negative,” MARC said.
While the visibility of progress billings from a few ongoing property developments remains modest at this juncture, the rating agency understands from YNH that the sales performance of its Solasta project is improving.
“Should this trend continue, coupled with an accelerated pace to conclude its asset disposal plans including the sale of the 5.1-acre land parcel in Desa Sri Hartamas and 163 Retail Park mall in Mont Kiara, YNH would be better placed to improve its financial position. The rating agency will continue to monitor developments in YNH to take appropriate rating action,” it added.
