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RAM Ratings affirms Dynasty Harmony
Published on 12 Sep 2025.
RAM Ratings has affirmed the AA3/Stable ratings of the RM165 mil Islamic Medium-Term Notes (IMTN) (2018/2033) and RM55 mil Islamic Medium-Term Notes (2025/2036) under Dynasty Harmony Sdn Bhd’s (Dynasty Harmony) RM300 mil Sukuk Programme (2018/2036) (the Sukuk).
Dynasty Harmony is a wholly owned funding vehicle of GFM Services Berhad (GFM Services) and sister company of KP Mukah Development Sdn Bhd (KP Mukah) – the concession holder that built and maintains the Universiti Teknologi MARA campus in Mukah, Sarawak, for which it enjoys predictable concession cash flows. To service dues under the Sukuk, Dynasty Harmony is entirely dependent on dividend distributions from KP Mukah after the latter meets its own operational and financial obligations.
The rating affirmations are premised on the transaction’s stable cash flow, adequate liquidity and healthy finance indicators, as measured by the subordinated finance service coverage ratios (sub-FSCRs) and finance service coverage ratios (FSCRs). The ratings are notched down to reflect Dynasty Harmony’s subordinated position to KP Mukah’s senior debt lender, which ranks ahead in payment priority and security position; principal repayment on Dynasty Harmony’s obligations commences only after the full redemption of KP Mukah’s debt obligations.
Timely concession payments and commendable campus maintenance – undertaken by Global Facilities Management Sdn Bhd, another sister company – during the review period allowed KP Mukah to pay dividends to Dynasty Harmony as scheduled. Cash retention measures imposed under the transaction, such as limits on shareholder distributions and spending, reduce the risk of cashflow leakages, further preserve the Company’s excellent credit profile and debt coverage.
Even under RAM’s stressed assumptions – such as delayed payments, non-performance deductions, increased maintenance costs, reduced investment income and KP Mukah’s lower financing expenses – KP Mukah’s and Dynasty Harmony’s minimum FSCRs and sub-FSCRs will perform above the respective rating thresholds of 1.50 times and 1.20 times. With KP Mukah’s senior debt full redemption slated in April 2028, structural subordination for Dynasty Harmony’s IMTN lenders will no longer apply, and may prompt a possible rating upgrade for the IMTN.
As any compensation for concession termination at KP Mukah is not linked to the holders of DHSB’s sukuk, the transaction is exposed to termination risk. In the unlikely event of a default by KP Mukah, compensation from the government – the ultimate paymaster for the concession – will address only the repayment of a financing facility under KP Mukah. Holders of the Sukuk may pursue recovery, though limited, through advances extended to GFM Services.
Analytical contacts
Liew Kar Ling
(603) 2708 8216
karling@ram.com.my
Davinder Kaur Gill
(603) 2708 8220
davinder@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
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
© Copyright 2025 by RAM Rating Services Berhad
