RAM Ratings assigns final AA3/Stable/P1 ratings to MTT Shipping’s sukuk

Published on 29 Aug 2023.

Share Tweet Email

RAM Ratings has assigned final ratings of AA3/Stable/P1 to MTT Shipping Sdn Bhd’s (the Company) Islamic Medium-Term Notes and Islamic Commercial Papers (ICP/IMTN) Programme, with a combined aggregate limit of up to RM1.5 bil. In doing so, we have reviewed all relevant transaction documents and found them to be in line with our expectations when the preliminary rating was assigned in May 2023.

MTT Shipping provides container liner shipping services to manufacturers, traders and freight forwarders, as well as feeder services to main line operators. It also has a growing charter hire operation. 

The ratings consider MTT Shipping’s established position in the local container shipping industry and its sturdy debt coverage ratios even after assuming lower freight/charter tariffs and gaps between charter periods when existing charters expire in our forecast. Debt-funded expansion and risks from its enlarged fleet amid weaker demand and the poorer trade outlook globally are moderating factors. MTT Shipping is also exposed to bunker fuel cost volatility, foreign exchange risk and the cyclicality of the shipping sector. Execution risks and sector volatility are mitigated, to some extent, by a strong management team with extensive industry experience (spanning 32-41 years) and demonstrated ability to optimise shipping routes in response to the dynamic market. Please refer to our final rating rationale for further details.


Analytical contacts
Karin Koh, CFA
(603) 3385 2508

Thong Mun Wai
(603) 3385 2522


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
© Copyright 2023 by RAM Rating Services Berhad

Rating Rationale

Ratings on MTT Shipping Sdn Bhd