KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) has affirmed its AAAIS and AA+IS ratings on Tradewinds Plantation Capital Sdn Bhd's (Tradewinds Capital) asset-backed RM180mil Class A and RM30mil Class B Sukuk Ijarah respectively.

The outlook on the ratings is stable. The ratings agency said on Wednesday Tradewinds Capital, a unit of Tradewinds Plantation Bhd (Tradewinds), was set up to issue the Sukuk Ijarah through a sale and leaseback agreement for a collateral portfolio comprising 12 oil palm estates and three palm oil mills.

"The ratings reflect the above-average performance of the securitised estates and comfortable loan-to-value (LTV) ratios relative to the respective rating bands.

"The stable outlook is premised on MARC's expectations that the collateral portfolio would continue to exhibit results consistent with the ratings of the sukuk," it said. MARC maintained its MARC-1ID(bg)/AAAID(bg) ratings on Tradewinds Capital's RM100mil bank guaranteed Murabahah commercial paper/medium term notes (BG Murabahah CP/MTN) programme with a stable outlook.

MARC also affirmed its MARC-1ID rating on Tradewinds Capital's RM90mil Murabahah Commercial Papers (Murabahah CP) with a stable outlook.

"The rating and outlook on the non-guaranteed Murabahah CPs mirror the short-term rating and outlook of Tradewinds as its operations would be the key source of repayment for the Murabahah CP," it said.

Tradewinds' short-term rating reflects the group's satisfactory liquidity and operating profitability, as well as borrowing availability under banking lines, moderated by its exposure to rubber price volatility post-acquisition of Mardec Bhd (Mardec).

MARC noted cash flow generation has weakened in during the first nine months of 2012, mainly as a result of higher working capital requirements at Mardec and Tradewinds' lower pre-tax profitability, as well as ongoing capital expenditure.

"The rating and the outlook on the Murabahah CP could come under pressure in the event the group continues to incur negative free cash flow," it cautioned.

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