RAM Ratings affirms ratings of Impian Ekspresi’s guaranteed MTN

Published on 12 Oct 2023.

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RAM Ratings has affirmed the enhanced ratings of Impian Ekspresi Sdn Bhd’s (the Company) RM450 mil Guaranteed Medium-Term Notes (MTN) Programme (2013/2024) as follows:



The Company is developing the site of the former DTC Complex into Pavilion Damansara Heights (the Project), an integrated development. The Project comprises nine office towers, three residential towers and a retail mall component. 

The enhanced ratings reflect irrevocable and unconditional guarantees from AAA-rated Bank Pembangunan Malaysia Berhad and Malayan Banking Berhad, which enhance the credit standing of the debt issues beyond the Company’s standalone credit strength. Excluding the guarantees, the Company’s ability to service its debt obligations depends on the Project’s timely completion and the take-up of the remaining residential units.  

In the near term, the Company faces heightened liquidity demands, given the upcoming programme expiry in November 2024 and repayment of existing term loans in Q4 next year. That said, shareholder support is expected to be forthcoming in event of any cash shortfalls. To this end, comfort is derived from the strong shareholder support displayed in the past.  Tan Sri Desmond Lim, the majority owner of the Company, has extended an irrevocable and unconditional undertaking to the guarantors of both series of MTN to ensure sufficient funds are available for the Project’s completion and cost overruns. Meanwhile, the redemption of the outstanding MTN under the RM450 mil programme is expected to be supported by the disposal of the retail mall or a refinancing exercise. 

In terms of construction progress, the Project is expected to be completed in 3Q 2024. Following an extension of time obtained from the Ministry of Housing, the estimated liquidated and ascertained damages are manageable at around RM19.2 mil. Despite a sharp increase in building material and labour costs, the Company is not anticipated to incur significant cost overruns in view of the fixed-price turnkey construction contract. We expect construction and execution risks to be manageable as operations have largely normalised. The good track record of the main contractor, WCT Berhad, is another mitigating factor.

Notwithstanding the challenging property market, all nine office towers have essentially been fully taken up. The sales progress of the residential towers is relatively slower, with 65.4% of units sold and another 9.8% booked as at end-July 2023. Ahead of the mall’s opening in October 2023, tenants have either leased or committed to lease a commendable 72.6% of its net lettable area.

We expect Pavilion Damansara Heights to continue to benefit from its prestigious address that boasts excellent visibility as well as road and public transport connectivity. The Project is also envisaged to gain from the experienced project team, mainly comprising personnel from Malton Group and Pavilion REIT Management Sdn Bhd. 


Analytical contacts
Hani Hamizah Nor Hashim
(603) 3385 2575

Thong Mun Wai
(603) 3385 2522

Media contact
Sakinah Arifin 
(603) 3385 2500


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

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