Moody’s might drop IOI

Moody's Investors Service said it placed the Baa2 issuer rating and senior unsecured bond ratings of IOI Corp. Bhd. on review for downgrade.

The senior unsecured bonds are issued by IOI Investments (L) Bhd. and IOI Ventures (L) Bhd., which are wholly owned subsidiaries of IOI.

Moody’s said the action follows the recent announcement of a 41% increase in the second interim dividend, to be paid in July 2014. Credit metrics were already challenged following the acquisition of Unico Desa in November 2013, the hiving off of the property assets in January – while leaving the bulk of the debt with the group – and shareholder friendly distributions during the year that seem to bear a limited relationship to the performance of the retained businesses in the financial year ended June 2014.

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