Outstanding feat

MALAYSIA: RAM Rating Services has assigned a rating of ‘AAA(s)’ to Muhibbah Engineering’s proposed RM130 million (US$41 million) Sukuk.

The long-term rating has a stable outlook. The rating is attributed to the guarantee from Malayan Banking worth RM135 million (US$42 million).

Muhibbah is an investment holding company. It is engaged in civil, marine and structural engineering contract related works.

Deteriorating quality

KUWAIT: Standard and Poor’s (S&P) has downgraded the long-term counterparty credit rating of the Commercial Bank of Kuwait (CBK) from ‘A-’ to ‘BBB’. The outlook for CBK is stable. It also affirmed its short-term rating of ‘A-2’. “The rating action is due to CBK’s asset quality, which has materially deteriorated and is likely to continue its negative trend in the coming quarters, impacting its profitability,” said S&P credit analyst Nicolas Hardy.

CBK, which owns the Tijari Islamic Fund, saw its net profit in 2009 dive by almost 100% due to huge provisions for bad loans. It posted US$500,000 in net profit compared to $350 million in the previous year.

Solid showing

QATAR: Fitch Ratings has affirmed Qatar Real Estate Investment Company’s (Alaqaria) long-term Issuer Default rating (IDR) and senior unsecured rating at ‘BBB+’, and its short-term IDR at ‘F2’. The IDR and senior unsecured were removed from Rating Watch Positive (RWP). The outlook is stable. Fitch also affirmed the senior unsecured rating of Qatar Alaqaria Sukuk Company’s US$300 million Sukuk (due in 2012) at ‘BBB+’, and removed it from RWP. The ratings are attributed to Alaqaria’s strong business model driven by a robust lessor profile, and above-average lease duration for the region.

Standing strong
SAUDI ARABIA: Fitch Ratings has assigned utility firm Saudi Electricity Company’s (SEC) Sukuk issue in May with an expected ‘AA-’ rating. The rating is in line with SEC’s long-term Issuer Default and senior unsecured ‘AA-’ ratings.

Ray of hope

UAE: Moody’s Investors Service has confirmed the ‘Ba1’ issuer and Sukuk ratings of port operator DP World, a subsidiary of Dubai World. The outlook is stable.

Moody’s said the restructuring proposal for Dubai World has reduced its concerns regarding the possible contagion of the parent company’s financial difficulties.

Furthermore, the recent restructuring proposal for the parent company has shown a renewed public commitment to safeguard healthy subsidiaries of Dubai World, including DP World, from any adverse actions from the parent.

Pulling up its socks

MALAYSIA: RAM Rating Services has upgraded New Pantai Expressway’s (NPE) RM490 million (US$154 million) Senior Bai Bithaman Ajil Notes (2003/2014) from ‘BBB3’ to ‘AA3’, with a stable outlook.

In addition, RAM has lifted the Rating Watch (with a positive outlook) on the senior notes.

The rating is attributed to the improvement in the debt-coverage level of NPE, with a minimum senior finance service coverage ratio of 2.6 times, following a debt restructuring exercise, made possible by a RM183.5 million (US$58 million) compensation from the government.

Stellar performance

MALAYSIA: Malaysian Rating Corporation (MARC) has placed the long-term financial institution ratings of both CIMB Bank and CIMB Islamic Bank on MARCWatch Positive (MWP). This is due to the relatively robust performance of both CIMB Bank and its subsidiary, CIMB Islamic Bank, despite a weaker economic environment, and expectations of continued improvements in their financial performance over the next 12 months as the domestic economy recovers.

CIMB Bank’s RM5 billion (US$1.6 billion) subordinated debt and Junior Sukuk Programs (‘AA’/ ‘AAIS’/ MWP) and CIMB Islamic Bank’s RM2 billion (US$626 million) Junior Sukuk Program (‘AAIS ‘/MWP) are included in the list.

Back on track

MALAYSIA: Malaysian Rating Corporation has affirmed its ‘AA-IS’ and ‘MARC-1ID’/‘AA-ID’ ratings on Tanjung Langsat Port’s (TLP) RM250 million (US$79 million) Sukuk Musharakah and RM135 million (US$43 million) Musharakah Commercial Papers/Musharakah Medium Term Notes Program. MARC has also removed the ratings from MARCWatch Negative where they were first placed in January. At the same time, the ratings have been revised to negative from stable.

The resolution of the MARCWatch Negative is attributed to the actions taken by TLP and its state-owned parent, Johor Corporation, to alleviate near-term concerns over TLP’s ability to meet its May Sukuk profit payments.

Remaining strong
MALAYSIA: Fitch Ratings has affirmed Public Bank’s individual rating at ‘B/C’ and support rating at ‘2’. The individual rating is attributed to the maintenance of robust loan quality, reasonably healthy earnings and the bank’s strong loss absorption capacity if operating conditions deteriorate unexpectedly. Public Islamic Bank is a subsidiary of Public Bank.

Tip-top condition

SAUDI ARABIA: Standard & Poor’s Ratings Services has affirmed the ratings of The Company for Cooperative Insurance (Tawuniya). The ratings are attributed to Tawuniya’s competitive position in the country’s market and its strong underwriting performance. Tawuniya provides Takaful products.