RAM Ratings affirms Northern Gateway's AA1 issue rating

RAM Ratings has affirmed the AA1/Stable rating of Northern Gateway Infrastructure Sdn Bhd's (the Company) RM340 mil MTN Programme (2017/2034).

The affirmation reflects Northern Gateway's strong debt servicing capacity, supported by healthy cash reserves and stable concession-based cash flow. The Company holds the concession to build and maintain the Bukit Kayu Hitam Immigration, Customs, Quarantine and Security (ICQS) complex in Kedah, which was completed in two phases, with the second on 26 June 2019. As such, the rating is primarily supported by the predictability of concession receipts, the essential nature of the asset and the absence of material operating volatility. 

As at end-February 2026, Northern Gateway's debt service coverage ratio (DSCR) was a robust 3.22 times - supported by RM84 mil in cash reserves and predictable monthly concession receipts. This provides substantial headroom against scheduled debt service even after dividend distributions of RM13 mil in 2025 (2024: RM10 mil). Operational performance also remained supportive of credit quality, with maintenance of the ICQS complex by related party Genesis Facility Solutions Sdn Bhd commendable, with minimal deductions in 2025 and none recorded in 1Q 2026. The rating nonetheless assumes a measured approach to upstream distributions, as sustained higher dividends could reduce buffers if not matched by ongoing cash accumulation. 

In downside scenarios of delayed concession payments and zero maintenance margins, DSCRs remain above 1.50 times throughout the bond's tenure, indicating adequate resilience under stress. While the rating remains sensitive to materially weaker liquidity, more aggressive shareholder distributions or prolonged payment delays beyond stressed assumptions, our rating assumes continued financial discipline and measured dividend policies to preserve liquidity and credit strength. 

Execution risk from additional wor