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-RAM Ratings retains AAA(s) rating on Pasdec's bonds.

BANKING AND CREDIT NEWS-January 25, 2011--RAM Ratings retains AAA(s) rating on Pasdec's bonds(C)2011 M2 COMMUNICATIONS

25 January 2011 - RAM Ratings confirmed on Tuesday the enhanced long-term rating of AAA(s) with a "stable" outlook of the MYR150m (USD49.2m/EUR 36m) Rainbow Exchangeable Bonds (REBs) of Malaysian property developer Pasdec Holdings Berhad (KUL:PASDEC).

The enhanced rating is based on the irrevocable and unconditional put option agreement (put option) granted by the State Government of Pahang (Pahang State) to the Security Trustee, for the benefit of the REB holders, with approval from the Federal Government. This put option enhances the credit profile of the REBs beyond Pasdec's inherent or stand-alone credit risk, the agency said.

The put option requires Pahang State to purchase - from the Security Trustee - the option shares (i.e. shares in IJM Corporation Berhad and YTL Cement Berhad) at the option price during the option period, upon the occurrence of a trigger event or event of default. The option price reflects the aggregate of the nominal amount of the REBs, their redemption premium and coupon payments, and all other outstanding amounts. The option price is not determined by the market price of the respective shares, RAM Ratings added.

Proceeds from the purchase of the option shares will subsequently be used to redeem the REBs. As at end-November 2010, MYR113m of REBs had been exchanged for the option shares and the same amount had been cancelled. The outstanding REBs, including the redemption premium, amounted to MYR37m as at the same date, the service specified.

Pasdec is the main property-development arm of Perbadanan Kemajuan Negeri Pahang (PKNP), which effectively owns 52% of the Group. PKNP is a statutory body established under the Pahang State Legislature under Enactment Act 12, 1965 as an economic-development agency. Pasdec remains one of the largest property developers in Pahang, with an operating track record that spans more than 20 years. Its main objective is to supply low-to-medium-cost housing to the public. However, it has also gradually moved into the development of medium-high to high-end residential and commercial properties.

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Publication:M2 Banking & Credit News (BCN)
Geographic Code:9MALA
Date:Jan 25, 2011
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