MARC RATINGS ASSIGNS PRELIMINARY RATING OF AA-IS TO WM SENIBONG CAPITAL'S PROPOSED RM1.0 BILLION SUKUK WAKALAH PROGRAMME

MARC Ratings has assigned a preliminary rating of AA-IS to special purpose vehicle WM Senibong Capital Berhad's (WMSC) proposed Islamic Medium-Term Notes (Sukuk Wakalah) Programme of up to RM1.0 billion. The rating outlook is stable. WMSC is wholly owned by WM Senibong Sdn Bhd.

The rating reflects the credit strength of property developer WM Senibong as the obligor of the proposed Sukuk Wakalah Programme. WM Senibong's healthy track record in property development on reclaimed land and inland areas in Johor Bahru, strong cash flow management and conservative balance sheet are key drivers to the assigned rating. Key moderating factors are the execution risk related to land reclamation operations, and the susceptibility of WM Senibong's financial performance to property market conditions.

WM Senibong is a member of Walker Group Holdings Pty Ltd, which holds approximately 43% interest in the company and is one of the largest privately held property groups in Australia. WM Senibong has been able to draw from its parent's expertise for its development activities that commenced in 2008 with the reclamation of 211 acres at the river mouth of Sungai Lunchu, flowing into Selat Tebrau. Senibong Cove, sited on the reclaimed land and comprising landed residential properties with waterfront features, has been well received. It has a completed gross development value (GDV) of RM1.58 billion. WM Senibong also undertakes mid-to-high-end landed residential and commercial property developments in Crest@Austin in the Taman Mount Austin township. Completed phases have a GDV of RM720 million with a take-up rate of 94%.

WM Senibong has ongoing GDV of RM600 million for projects in Senibong Cove, Crest@Austin and Senibong Hills (a modest development adjacent to Senibong Cove) that would provide earnings visibility over the near term; the take-up rate is expect