RAM Ratings publishes rating guidance on Data Center financing transactions

Published on 02 Oct 2025.

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RAM Ratings has published an FAQ on RAM’s key analytical considerations to assess data centre (DC) financing transactions. While a transaction has yet to be funded by the domestic debt capital market, the agency notes the robust growth of the sector in recent years, with Malaysia rapidly emerging as a regional hub and preferred location for DCs. While most investments are supported by internal capital, private equity and credit, and bank loans, the scale and complexity of current projects are pointing to the need for more advanced and substantial financing arrangements.

In its commentary, RAM notes that Malaysia’s mature and deep bond and sukuk market could emerge as a viable funding alternative for the sector. Cash flow considerations will primarily underpin the credit assessment of most DC financing. However, the rating outcome is also dependent on the deal structure and specific characteristics of each transaction; these will determine the appropriate rating methodology to be applied by RAM.  As is, RAM expects to adopt a hybrid approach encompassing aspects of its existing rating methodologies. 

“We believe the domestic capital market, with its innovative financing structures and strong access to sustainable finance, is well-positioned to support the growth of the DC market in Malaysia, despite possible potential regulatory, policy and environmental hurdles”, states Davinder Kaur Gill, senior vice president of Infrastructure & Utilities. This FAQ aims to provide greater transparency and clarity around our analytical considerations of the sector. “Should any transaction materialise in the near future, RAM is well-positioned to support the bond market with its independent assessment”, she adds. 

The FAQ document can be found under the Criteria & Methodology section at https://www.ram.com.my/ratings and is available for download at this link.

 

Analytical contacts
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
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