Find A Rating 
PRESS RELEASES
RAM Ratings affirms Northern Gateway’s AA1 issue rating
Published on 23 Jul 2026.
RAM Ratings has affirmed the AA1/Stable rating of Northern Gateway Infrastructure Sdn Bhd’s (the Company) RM340 mil MTN Programme (2017/2034).
The affirmation reflects Northern Gateway’s strong debt servicing capacity, supported by healthy cash reserves and stable concession-based cash flow. The Company holds the concession to build and maintain the Bukit Kayu Hitam Immigration, Customs, Quarantine and Security (ICQS) complex in Kedah, which was completed in two phases, with the second on 26 June 2019. As such, the rating is primarily supported by the predictability of concession receipts, the essential nature of the asset and the absence of material operating volatility.
As at end-February 2026, Northern Gateway’s debt service coverage ratio (DSCR) was a robust 3.22 times – supported by RM84 mil in cash reserves and predictable monthly concession receipts. This provides substantial headroom against scheduled debt service even after dividend distributions of RM13 mil in 2025 (2024: RM10 mil). Operational performance also remained supportive of credit quality, with maintenance of the ICQS complex by related party Genesis Facility Solutions Sdn Bhd commendable, with minimal deductions in 2025 and none recorded in 1Q 2026. The rating nonetheless assumes a measured approach to upstream distributions, as sustained higher dividends could reduce buffers if not matched by ongoing cash accumulation.
In downside scenarios of delayed concession payments and zero maintenance margins, DSCRs remain above 1.50 times throughout the bond’s tenure, indicating adequate resilience under stress. While the rating remains sensitive to materially weaker liquidity, more aggressive shareholder distributions or prolonged payment delays beyond stressed assumptions, our rating assumes continued financial discipline and measured dividend policies to preserve liquidity and credit strength.
Execution risk from additional works remains manageable and does not currently pressure the rating. The Company was appointed by the Government of Malaysia in 2024 to construct a 0.9 km road and accompanying infrastructure linking Thailand’s new Sadao border checkpoint to the ICQS complex, with the border opened on 11 July 2026 and handover expected two months later. Structural safeguards that ringfence completion, funding and financial risks support our view that the works are credit neutral to the MTN rating.
As with other concession projects, Northern Gateway remains exposed to concession termination risk. While compensation terms are clearly defined, delays in reimbursement may arise. Termination, however, is considered unlikely owing to the straightforward nature of maintenance obligations and the credit standing of the government as counterparty. Nonetheless, a change in concession terms, persistent performance failures or any weakening in the timeliness of government payments beyond the delays already assumed would be negative for the credit profile.
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 2026 by RAM Rating Services Berhad
