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RAM Ratings affirms AAA(s) sukuk ratings of Khazanah’s funding conduits
Published on 14 Nov 2025.
RAM Ratings has affirmed the ratings of Islamic securities programmes established by funding conduits of Khazanah Nasional Berhad (Khazanah) – the sovereign wealth fund of Malaysia – as follows:
The suffix (s) denotes the enhancement of the issue ratings beyond their standalone credit strength, reflecting Khazanah’s contractual obligation to cover any shortfall in income distributions and capital returns faced by the conduits at maturity or upon the occurrence of a dissolution event.
The rating action is based on Khazanah’s vital role in managing strategic government assets and driving new economic growth areas with socio-economic impact. Its credit strength remains aligned with the government’s, supported by strong institutional linkages and the expectation of timely extraordinary support if needed.
Khazanah’s financial performance stayed sound, with portfolio realisable asset value (RAV) rising 12% y-o-y to RM151 bil as at end-2024 – the strongest growth in a decade – backed by robust Malaysian equity gains. The six-year time-weighted rate of return on net asset value improved to 6.2% (2023: five-year average of 2.9%). While Khazanah’s investment portfolio is diversified across more than 10 sectors and countries, it remains largely domestic and limited visibility of investments in the private market makes downside risks harder to gauge.
Khazanah maintains strong financial flexibility, supported by ample unutilised bond programmes and regular market access through funding conduits. Total extended company debt dropped 5.0% y-o-y to RM47.7 bil, resulting in improved RAV liability cover of 3.2 times as at end-December 2024. Khazanah’s exposure to foreign-denominated borrowings (40% of total debt) is largely naturally hedged against earnings from overseas investments. Dividend income-to-interest coverage eased to 1.7 times in 2024 (2023: 2.5 times) due to earlier bumper payouts but should hover around the same level with prudent capital management and stable portfolio performance.
Recent initiatives under the Ekonomi MADANI Budget and Dana Impak programmes include a RM1 bil allocation each to the National Fund-of-Funds, the Mid-Tier Companies Growth & Innovation Programme, and strategic investments to strengthen Malaysia’s semiconductor industry.
Analytical contacts
L Nurisya Abdullah
(603) 2708 8238
nurisya@ram.com.my
Tan Han Nee
(603) 2708 8322
hannee@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
