RAM Ratings places Musteq Hydro' rating under watch.
BANKING AND CREDIT NEWS-28 June 2010-RAM Ratings places Musteq Hydro' rating under watch(C)1994-2010 M2 COMMUNICATIONS http://www.m2.com
28 June 2010 - Malaysian RAM Ratings placed on Friday under watch, with a "negative" outlook the A2-rated bonds of local hydropower company Musteq Hydro Sdn Bhd.
The rating action on the MYR108m (USD33.2m/EUR26.9m) Al-Bai Bithaman Ajil fixed-rate serial bonds was triggered by the companyA[cent sign]a'[not sign]a"[cent sign]s continued interest payment on shareholderA[cent sign]a'[not sign]a"[cent sign]s advances despite the fact that its longer-term debt-servicing ability is already at risk. This is the reason behind the outlook revision to "negative" on 30 July 2009.
The agency said that as a result of having run down its cash reserves, the company is highly unlikely to be able to meet the debt service reserve accountA[cent sign]a'[not sign]a"[cent sign]s (DSRA) balance requirement under the Trust Deed on 30 July 2010. Under the terms of the Trust Deed, Musteq Hydro must always maintain an amount equivalent to its total debt obligations due in the next six months, RAM Ratings added.
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