RAM 2024 Corporate Default & Rating Transition Study: Positive tilt in credit trends

Published on 03 Apr 2025.

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RAM has released its annual Corporate Default and Rating Transition Study, which provides an update on the credit performance of RAM’s rated portfolio in 2024. 

On the whole, rating actions were positively biased, as evidenced by thirteen issuer upgrades. These were mostly driven by improving credit fundamentals, with a handful attributable to reassessments of parental support. Combined with seven entities whose stable rating outlooks were revised to positive, the positive direction tally for the year was twenty, exceeding three negative rating actions in 2024 which were attributable to outlook revisions. 

Robust GDP growth and supportive financing conditions have supported credit health. With no defaults or downgrades, the rating drift remained in positive territory. As at end-2024, some 83% of RAM’s rated portfolio were rated at least AA3 or higher. This underscores the high credit quality of RAM’s rated portfolio.

As at end-2024, RAM had an almost-equal composition of 9 entities with a positive outlook and 8 entities on negative outlook, including two on negative rating watch. Positive outlook revisions reflect continued credit performance improvements whilst negative outlook placements were mostly attributable to case-specific issues rather than indicative of broad sector weaknesses. Default risk, if any is expected to be contained within 2% of the rated portfolio and originating from entities already at speculative grade ratings. Some transactions are enhanced by guarantees from highly rated guarantors, limiting investors’ losses in the event of default.

The 2024 edition of the Corporate Default and Rating Transition Study is RAM’s 27th release, featuring a total of 675 corporations and financial institutions rated by RAM between 1992 and 2024. RAM’s 2024 default study cohort comprises 173 rated entities. With rating data spanning three economic cycles, RAM’s study is a key source of information for Malaysian bond market credit trends.

 

Analytical contacts
Nigel Asirraj
(603) 3385 2537
nigel@ram.com.my

Joanne Kek
(603) 3385 2520
joanne@ram.com.my

Media contact
Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my

 

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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