[RAM] RAM Ratings assigns final AA3 rating to Dynasty Harmony's subsequent RM55 mil IMTN issued

RAM Ratings has assigned a final rating of AA₃/Stable to Dynasty Harmony Sdn Bhd’s RM55 mil Islamic Medium-Term Notes (IMTN) under the existing RM300 mil IMTN Programme (the Sukuk). This follows an earlier issuance of RM165 mil under the Sukuk. The AA₃ rating for the RM165 mil tranche was last affirmed on 4 October 2024 (see press release here), which ranks pari passu to the RM55 mil IMTN. 

Dynasty Harmony is a wholly owned funding vehicle of GFM Services Bhd (GFM) and a sister company of KP Mukah Development Sdn Bhd (KP Mukah) – the concession holder that built and maintains the Universiti Teknologi MARA campus in Mukah, Sarawak. Issuance proceeds from the RM55 mil IMTN will be predominantly advanced to GFM for investments and working capital. 

In assigning the final rating, we have reviewed the updated transaction documents and found them to be in line with preliminary expectations. Updates include a two-month deferment of the Sukuk’s maturity to February 2036 from December 2035, and a lower issuance amount of RM55 mil (previously, RM60 mil). Consequently, the dividend distribution schedule was adjusted accordingly for these updates. 

The AA3 rating continues to be anchored by the concession-backed project economics as well as restrictions, limitations and covenants under the transaction. The transaction’s strong debt coverage under RAM’s stressed analysis – as measured by the minimum subordinated finance service coverage ratio of 1.70 times – is projected to remain above the 1.20 times threshold required for a low-complexity private finance initiative/public-private partnership project. The rating is also notched down to reflect Dynasty Harmony’s subordinated position to KP Mukah’s senior lenders, which rank ahead in terms of payment priority and security. To service its dues under the Sukuk, Dynasty Harmony is entirely dependent on cashflows from KP Mukah’s dividend distributions or ordinary share subscriptions after the latter meets its own operational and financial obligations. 


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Liew Kar Ling    
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Davinder Kaur Gill
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