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RAM Ratings affirms Johor Corporation at AAA/Stable/P1
Published on 28 Jul 2026.
RAM Ratings has affirmed Johor Corporation’s (JCorp or the Group) AAA/Stable/P1 corporate credit ratings and the AAA/Stable ratings of its RM3.5 bil Islamic Medium-Term Notes Programme and RM2 bil State-Guaranteed Programme. The RM2 bil programme benefits from an irrevocable and unconditional guarantee from the Johor state government.
The ratings incorporate an uplift to reflect a ‘very high’ likelihood of extraordinary state support during periods of financial stress. This assessment reflects JCorp’s strategic importance to Johor’s long term socio-economic development and close linkages with the State. Government support has historically included guarantees and letters of undertaking for JCorp’s borrowings. JCorp is one of the few state agencies in Malaysia with access to government-guaranteed borrowings.
On a standalone basis, JCorp’s credit profile is supported by its diversified portfolio and strong financial flexibility. Healthy contributions from its real estate, agribusiness and healthcare segments continue to mitigate the remaining earnings weakness in its food and restaurant operations, which charted commendable improvement in FY Dec 2025. Its sizeable asset base further provides alternative sources of liquidity through asset monetisation and divestment options, although execution timing remains a key sensitivity.
JCorp’s ratings are moderated by its less predictable company-level cash flow, which remains largely dependent on inherently lumpy land sales and dividend upstreaming from investee companies. This has resulted in volatile operating cashflow interest coverage of 0.9 times-3.2 times over the past five years. The metric came in at a modest 0.96 times in FY Dec 2025, reflecting normalised dividend income and delays in concluding land sales. The Group’s consolidated operating cash flow debt cover, nevertheless, is projected to stay sound within historical levels of 0.1 times-0.2 times (FY Dec 2025: 0.19 times), supported by recurring cash generation from core subsidiaries.
We anticipate JCorp’s credit metrics to strengthen over the next one to two years, supported by ongoing asset monetisation and corporate exercises that are expected to unlock value and partly fund the planned RM930 mil sukuk repayment in fiscal 2027. Accordingly, company-level gearing is projected to improve to below 0.5 times thereafter, from 0.56 times as at end-December 2025. Group gearing, however, may peak nearer to 1.0 times in the medium term from the 0.81 times level as at end-December 2025, as subsidiary-level debt drawdowns offset reductions in borrowings at the holding company level.
Analytical contacts
Hani Hamizah Nor Hashim
(603) 2708 8240
hani@ram.com.my
Thong Mun Wai
(603) 2708 8255
munwai@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
