YNH Property Quick Update – Defers Perpetual Securities Coupon for a Second Time

• On 23 July 2026, YNH Property Berhad (YNH) announced deferral of RM34.41 million in coupon payments across two tranches under its perpetual securities programme to preserve its existing cash reserve to fund its active development pipeline and operational needs.

• This represents the second coupon deferral exercise for both outstanding perpetual securities tranches, involving a combined deferred coupon payment of RM34.41 million (Table 1).

Table 1: YNH Perpetual Securities – Deferred Coupon Payment Details

• Importantly, deferred coupon payments do not constitute as an event of default. Unpaid coupons are cumulative, will continue to accrue in accordance with the Trust Deed, and remain payable to holders of the perpetual securities at a call date. For perpetual securities, an event of default is only triggered by non-payment without a valid deferral (failing to provide written notice at least 5 days before the coupon payment date) or in the event of issuer winding-up.

• On 23 July 2026, YNH Construction Sdn Bhd, a wholly owned subsidiary of YNH, received approval from the Inland Revenue Board of Malaysia (IRB) for a revised settlement arrangement to settle its outstanding tax liability of RM5.16 million by 10 September 2026. The IRB also agreed to waive the RM1.71 million tax penalty, subject to timely settlement of the outstanding liability, reducing the near-term winding-up risk against the subsidiary.

• As highlighted in our previous article Proposed YNH Land Disposal Positive for Perpetual Bondholders | Bondsupermart   YNH announced the proposed disposal of a freehold commercial development land in Kuala Lumpur to Chin Hin Property (JSI) Sdn. Bhd. for RM455 million, comprising RM409.5 million cash consideration and RM45.5 million equity instruments. The proceeds will primarily be used to redeem perpetual securities secured against the land, reducing stepped-up coupon obligations and improving liquidity.

• The proposed disposal remains subject to due process and various conditions precedent, including shareholders’ approvals from both YNH Property Berhad and Chin Hin Group Property Berhad, regulatory approvals, and the procurement of the amended development order (DO). Hence, completion of the transaction remains subject to execution and approval risks.

• Both perpetual securities are secured by the same underlying land asset, with a reported security cover ratio of 1.60 times (Table 2). However, the recovery value for bondholders remains dependent on the successful execution of the proposed land disposal, regulatory approvals, and the ability to realise the asset value within the required timeframe.

Table 2: YNH Perpetual Bond

• This second coupon deferral is in line with our view and represents a continuation of YNH’s previous deferral exercise amid tightening liquidity conditions. As the proposed land disposal transaction remains pending completion, it is expected to be the key source of liquidity for YNH to redeem its perpetual securities obligations.

• We view the proposed disposal as positive for YNH’s perpetual bondholders. Once all required approvals are obtained and the transaction becomes unconditional, YNH is expected to use the disposal proceeds to redeem the outstanding perpetual securities, thereby discharging the security over the land.

• Although the proposed disposal would significantly reduce long-term debt through the redemption of the perpetual securities, YNH’s liquidity position remains constrained. As of 3QFY26 (Mar 2026), the Group’s available cash of RM22.4 million remains insufficient to fully cover its short-term debt maturities of RM379.8 million due within one year.

• Overall, we maintain our negative view on YNH with a negative outlook, as YNH may continue to defer coupon payments on its perpetual securities in the near term amid tight liquidity and ongoing project commitments, while relying on cash preservation and asset disposals to manage its financial obligations.

• That said, we continue to closely monitor YNH’s financial performance and developments, where we periodically reassess and update our views as new information becomes available.

• For further insights, please refer to our previous article:   Proposed YNH Land Disposal Positive for Perpetual Bondholders | Bondsupermart and  YNH Property Quick Update - Exercises Option to Defer Perpetual Securities Coupon | Bondsupermart