Fitch assigns Serba Dinamik’s sukuk BB-

Fitch Ratings said it assigned Serba Dinamik Holdings Bhd.’s proposed dollar-denominated senior unsecured sukuk an expected rating of BB-. The sukuk, which will be sold by SDHB’s wholly owned subsidiary, SD International Sukuk II Ltd., will be the obligations of Serba Dinamik International Ltd. and guaranteed by SDHB, which is rated BB-.

The agency rates the sukuk at the level as SDHB because it’s guaranteeing them.

Proceeds from the proposed sukuk will be transferred to an escrow account and cannot be used by SDIL until the successful redemption of its ringgit sukuk. The guarantee by SDHB over SDIL, the obligor of the sukuk, will also only take place after the successful redemption of the ringgit sukuk, Fitch said.

Proceeds will be used to redeem the dollar sukuk itself if SDHB is not able to redeem the ringgit sukuk, thus cancelling the entire offer. The final rating on the proposed dollar sukuk is contingent upon successful redemption of the ringgit sukuk.

SDHB will use the proceeds to finance capital spending for medium-term growth. The company sees using about half of the proceeds for project acquisitions and the rest for working capital.

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