RAM Ratings releases criteria for rating state and local governments

Published on 26 Oct 2020.

Share Tweet Email

RAM Ratings today released an updated criteria paper on assessing credit risks of state governments and their application to the rating of state-government-linked entities. In line with RAM’s thought leadership role, we have, for the first time, published in this paper our approach for rating Malaysian local governments comprising city, municipal and district councils. 

Federal, state and local governments represent the three tiers of government that collectively form the Government of Malaysia (GoM). Malaysia’s centralised government framework ensures tight inter-governmental linkages. This limits the divergence of lower-tier government ratings from the GoM’s AAA rating. Nonetheless, there are significant intra and inter-governmental differences in economic structure, financial positions as well as political and institutional settings for second and third-tier governments. The hierarchical system of authority and provisions of the Constitution also require a different approach for rating debt and general payment risks of lower-tier governments. 

For further details, please refer to Rating State and Local Governments of Malaysia, which is available at www.ram.com.my.


Analytical contact
Esther Lai
(603) 3385 2608

Media contact
Padthma Subbiah
(603) 3385 2577


About RAM Rating Services Berhad (RAM Ratings)

Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission’s Guidelines on Registration of Credit Rating Agencies, 2011. In addition to the provision of credit ratings for corporate bonds and sukuk and their issuers, RAM Ratings also provides research and publications on Islamic finance, fixed income and macro-economic and industry analysis as well as data analytics relating to credit risk, counterparty assessments and other related domains. 


ALL INFORMATION IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. Although every reasonable care has been taken to ensure the accuracy, completeness and objectivity of the information contained in this Media Release, RAM Ratings makes no representation or warranty, whether express or implied, as to its accuracy, completeness and objectivity and accept no responsibility or liability relating to any losses or damages howsoever suffered by any person arising from any reliance on the views expressed or information in this Media Release. RAM Ratings assumes no obligation to update any information or statement contained herein, save for any information required to be disclosed by law.

Published by RAM Rating Services Berhad
© Copyright 2020 by RAM Rating Services Berhad
All rights reserved. This material may not be published, reproduced, broadcast, rewritten or redistributed without prior permission.

Publication Date Published Category
Rating State and Local Governments of Malaysia 26-Oct-2020 Criteria & Methodology View PDF