[RAM] RAM Ratings affirms IGB REIT Capital's RM1.20 bil Second Tranche MTN at AAA/Stable

RAM Ratings has affirmed the AAA/Stable rating of the RM1.20 bil Second Tranche Medium-Term Notes (MTN) issued under IGB REIT Capital Sdn Bhd’s RM5.0 bil MTN Programme and secured against Mid Valley Megamall (the Mall). The notes are secured against Mid Valley Megamall, whose high-quality collateral profile and resilient cashflow generation ultimately underpin the rating.

IGB REIT Capital is a special-purpose vehicle established by IGB Real Estate Investment Trust. The rating affirmation reflects the transaction’s strong collateral coverage and our expectation that Midvalley Megamall will continue to generate resilient operating cash flows, supported by its dominant market position, near-full occupancy and strong tenant demand, which help mitigate risks from softer discretionary spending, inflationary pressures and rising operating costs.

In FY Dec 2025, the Mall’s net property income (NPI) grew 9.1% y-o-y to RM363.8 mil, driven mainly by higher base rents, increased service charges and lower operating expenses. The reconfiguration of South Court improved space utilisation and attracted higher-paying tenants, reinforcing the Mall’s rental reversion prospects. Occupancy strengthened to 99.8% as at end-December 2025, with rental averaging a higher RM17.87 psf. Momentum continued into 6M FY Dec 2026, with a NPI of RM189.8 mil, bolstered by festive period and public holiday spending.

Although the Mall’s recent earnings have outperformed RAM’s sustainable annual cash flow assumption of RM350 mil, we have maintained this assumption to reflect the need for clearer evidence that the stronger performance can be sustained through the cycle. The assumption also recognises the Mall’s already high occupancy base and the likelihood that a substantial portion of the benefits from recent asset enhancement initiatives have already been realised.

RAM’s resulting adjusted market value provides substantial collateral support for the MTN, reflected in a loan-to-value ratio of 29.4% and a stressed debt service coverage ratio of 3.43 times. These metrics indicate significant headroom against potential asset value declines or cashflow stress, consistent with the strong protection expected at the current rating level.


Analytical contacts
Zahra Zarir
(603) 2708 8243
zahra@ram.com.my 

Lim Chern Yit 
(603) 2708 8302
chernyit@ram.com.my 

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Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my