Refinancing in place for Malaysian highway concession

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Refinancing in place for Malaysian highway concession

Malaysian toll road Senai-Desaru Expressway (SDEB), the concessionaire of the 77-km inter-urban Senai-Desaru Expressway (SDE) in Johor, has issued RM1.89 billion (US$586 million) in sukuk bonds to refinance its existing senior and junior debt.

The underperformance of traffic flow has impacted SDEB's cash flow generation, necessitating the restructure of its financial obligations.

Malaysian Rating Corporation Berhad (MARC) has assigned a rating of BBB-IS to the bonds. Bank Muamalat led the issue and CIMB was facility agent.

This announcement follows the 15-year extension of SDEB's concession agreement from July 2038 to July 2053 granted by the Government of Malaysia on April 29, 2014.

SDEB is a 70:30 joint-venture between Rancak Bistari Sdn Bhd, a company related to Ranhill Berhad and YPJ Holdings Sdn Bhd, a Johor state-owned entity.

The project cost of the expressway of RM1.37 billion was funded through RM939 million in debt and RM430 million in equity, which comprised R25 million share capital and RM405 million irredeemable convertible unsecured loan stocks (ICULS).

The 77 km Senai-Desaru expressway project, which was full opened on 10 June 2011, involved the engineering and construction of 6 interchanges, 1 intersection, 4 toll plazas, 2 Rest & Service Areas and also the landmark bridge across Sungai Johor. The expressway alignment traverses through Senai, Ulu Tiram, Layang Reservoir, Pasir Gudang and Penawar/Desaru. The road is the main connector from the east to the west of Johor.

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