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RAM Ratings affirms Dynasty Harmony’s AA3/Stable issue ratings
Published on 30 Jul 2026.
RAM Ratings has affirmed the AA3/Stable ratings of Dynasty Harmony Sdn Bhd’s RM165 mil Islamic Medium-Term Notes (2018/2033) and RM55 mil Islamic Medium-Term Notes (2025/2036), issued under its RM300 mil Sukuk Programme (2018/2036) (the Sukuk).
The affirmation is premised on the transaction’s stable and predictable cash flows, adequate liquidity and strong debt-servicing indicators, as measured by the subordinated finance service coverage ratio (sub-FSCR) of 2.07 times and finance service coverage ratio (FSCR) of 2.36 times, respectively, as at end-February 2026. The ratings are further supported by restrictive covenants that prohibit shareholder distributions and additional borrowings, which help preserve cash within the transaction structure and enhance sukukholders protection.
Dynasty Harmony is a wholly owned funding vehicle of GFM Services Berhad and a sister company of KP Mukah Development Sdn Bhd (KP Mukah), the concession holder for the Universiti Teknologi MARA campus in Mukah, Sarawak. KP Mukah receives predictable concession income and upstreams dividends to Dynasty Harmony after meeting its operational and financial obligations. As Dynasty Harmony has no operating business of its own, its repayment capacity depends entirely on cash distributions from KP Mukah. The issue ratings are notched down to reflect Sukuk’s structural subordination to KP Mukah’s senior lender.
During the review period, timely concession payments and satisfactory campus maintenance by Global Facilities Management Sdn Bhd, another GFM Group subsidiary, enabled KP Mukah to distribute dividends to Dynasty Harmony as scheduled. Supported by healthy cash balances and transaction cash retention features, the consolidated sub-FSCR and FSCR are expected to stay above respective rating thresholds of 1.20 times and 1.50 times, even after factoring in payment delays and performance-related deductions.
The Sukuk’s structural subordination is expected to fall away once KP Mukah fully repays its senior borrowings in April 2028. This could lead to a one-notch upgrade of the sukuk to AA2/Stable if Dynasty Harmony maintains FSCRs above 1.35 times, or a two-notch upgrade to AA1/Stable if FSCRs remain above 1.50 times, provided other credit fundamentals and transaction protections remain intact.
The transaction remains exposed to concession termination risk. As termination compensation is linked to KP Mukah’s senior obligations rather than the Sukuk, sukukholder recovery could be limited in a default scenario, although advances extended to GFM Services may afford some relief.
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
