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RAM Ratings upgrades UEM’s issue rating to AAA(s)/Stable
Published on 20 Aug 2026.
RAM Ratings has upgraded the issue rating of UEM Group Berhad’s RM7 bil Sukuk Wakalah programme, issued through wholly owned funding vehicle UEM Olive Capital Berhad, to AAA(s)/Stable from AA1(s)/Stable.
The rating reflects strong strategic alignment between UEM and its parent Khazanah Nasional Berhad (the Fund), Malaysia’s sovereign wealth fund. The upgrade stems from RAM’s expectation of a ‘very high’ likelihood of extraordinary support, revised from the previous assessment of ‘high’ under the rating agency’s Government-Linked Entities rating framework.
This stronger alignment is driven by UEM’s strengthened role as Khazanah’s infrastructure arm and designated pillar to spearhead infrastructure and renewable energy (RE) investments that support national priorities, including domestic investment, decarbonisation and green industry development. UEM’s ties with the Fund have further strengthened since 2023, with the anticipated expansion of UEM’s investment mandate. Beyond ongoing board oversight and strategic direction from the Fund, three Khazanah executives have assumed key senior leadership roles at UEM in 2024-2025 as Managing Director, Chief Financial Officer and Chief Strategy Officer, while board representation also increased. More recently, UEM also established an Asset-Liability Management Framework which was approved by the Board to support more disciplined investment execution and closer oversight as the Group scales up its role as Khazanah’s infrastructure and RE investment platform.
UEM plans to issue approximately RM2.2 bil of sukuk through 2026-2028 to fund potential investments in RE and infrastructure assets that have yet to be disclosed. Timely earnings and cash flow contributions from these new investments will be crucial as debt rises. In the meantime, UEM’s debt-servicing capacity is expected to remain adequately supported by dividends from existing subsidiaries, cash reserves and diversified funding access.
Sturdy performances from key subsidiaries, Cement Industries of Malaysia Berhad and UEM Sunrise Berhad, together with equity-accounted earnings from Malaysia Airports Holdings Berhad (MAHB), supported the Group’s earning base. UEM’s pre-tax profit rose to RM1.4 bil in FY Dec 2025 (FY Dec 2024: RM923.3 mil), further lifted by an exceptional gain from MAHB’s privatisation.
Analytical contacts
Chuan Shyang Lin
(603) 2708 8209
shyanglin@ram.com.my
Karin Koh, CFA
(603) 2708 8237
karin@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
