RAM Ratings assigns final AAA rating to IGB REIT Capital’s RM1.20 bil Second Tranche MTN

Published on 15 Sep 2022.

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RAM Ratings has assigned a final rating of AAA/Stable to the RM1.20 bil second issuance (Second Tranche MTN) under IGB REIT Capital Sdn Bhd’s (the Issuer) RM5.0 bil MTN Programme (the Programme). 

A wholly owned subsidiary of IGB Real Estate Investment Trust (IGB REIT), IGB REIT Capital is a special-purpose vehicle incorporated to facilitate the fundraising exercise under the Programme. The Second Tranche MTN will be secured against Mid Valley Megamall (the Mall), with issuance proceeds used to redeem the outstanding RM1.20 bil First Tranche MTN on the expected maturity date of 20 September 2022. Located in Mid Valley City, the Mall is a five-level retail property with one mezzanine floor, two basement and four elevated car park levels. As at end-June 2022, its market value stood at RM3.67 bil.

RAM views the overall quality of the Mall as exceptional, with a RAM Property Score of R-4.65 (out of a maximum of R-5.00). This is anchored by its strategic location, diversified tenant base, healthy lease maturity profile and experienced and capable management, among other factors. Based on our adjusted valuation of RM3.63 bil for the Mall, the resultant loan to value ratio of 33.1% and stressed debt service coverage ratio of 2.84 times indicate strong credit support for the Second Tranche MTN. 

In assigning the final rating, we have considered the final coupon rate and transaction structure and reviewed all relevant transaction documents. We find these to be in line with our expectations when we assigned the preliminary rating, published on 11 August 2022. Please refer to our final rating rationale for further details on the assigned rating. 


Analytical contacts
Liew Kar Ling
(603) 3385 2586

Lim Chern Yit
(603) 3385 2528


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
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Rating Rationale

Ratings on IGB REIT Capital Sdn Bhd