RAM Ratings affirms AAA(s) sukuk ratings of Khazanah's funding conduits

RAM Ratings has affirmed the ratings of Islamic securities programmes established by funding conduits of Khazanah Nasional Berhad (Khazanah) - the sovereign wealth fund of Malaysia - as follows: 

Issuer	                                                       Facility	                                                  Rating/Outlook
Rantau Abang Capital Berhad	RM7.0 bil Islamic Medium-Term Notes (MTN) Sukuk Musyarakah Programme (2006/2041)	  AAA(s)/Stable
Danga Capital Berhad	        RM10.0 bil Islamic Securities Programme (2009/2044)	                                  AAA(s)/Stable
Ihsan Sukuk Berhad	        RM1.0 bil Islamic MTN Sukuk Ihsan Programme (2015/2040)	                                  AAA(s)/Stable
Danum Capital Berhad	        RM20.0 bil Islamic MTN Sukuk Danum Programme (2019/2069)	                          AAA(s)/Stable

The suffix (s) denotes the enhancement of the issue ratings beyond their standalone credit strength, reflecting Khazanah's contractual obligation to cover any shortfall in income distributions and capital returns faced by the conduits at maturity or upon the occurrence of a dissolution event.

The rating action is based on Khazanah's vital role in managing strategic government assets and driving new economic growth areas with socio-economic impact. Its credit strength remains aligned with the government's, supported by strong institutional linkages and the expectation of timely extraordinary support if needed. 

Khazanah's financial performance stayed sound, with portfolio realisable asset value (RAV) rising 12% y-o-y to RM151 bil as at end-2024 - the strongest growth in a decade - backed by robust Malaysian equity gains. The six-year time-weighted rate of return on net asset value improved to 6.2% (2023: five-year average of 2.9%). While Khazanah's investment portfolio is diversified across more than 10 sectors and countries, it remains largely domest