Bond Market News

Serba Dinamik was downgraded by both S&P and Fitch to CC and C, from CCC and CCC- respectively. The downgrade from both rating agencies come after confirmation from Serba Dinamik that it missed the $7mn coupon payment on its 6.3% Sukuk due May 2022 post which it has entered a 30-day grace period. Serba Dinamik’s liquidity is expected to remain weak even if it manages to make its outstanding coupon payment as it has a sizable MYR 99mn ($23.8mn) syndicated loan amortization payment due in December 2021. The company also has sizable maturities in May 2022, including MYR 100mn ($24.1mn) of commercial paper and $222mn in sukuk. In comparison, the company’s last unaudited report saw cash balances of MYR 497mn ($119.7mn). Besides, a prolonged delay in finalizing its statutory accounts for fiscal 2020, uncertain status of the special independent reviews and legal action against the Bursa Malaysia and EY, only complicates matters.

For the rating action by Fitch, click here and for S&P’s action, click here