Moody’s Affirms Khazanah’s A3 Rating, Outlook Stable on Strong Government Support

Singapore, August 26, 2025 – Moody’s Ratings has affirmed the A3 long-term issuer rating of Khazanah Nasional Berhad, Malaysia’s sovereign wealth fund, while maintaining a stable outlook. The rating incorporates Khazanah’s baa3 Baseline Credit Assessment (BCA) and three notches of uplift, reflecting Moody’s expectation of very high government support given its strategic importance to the nation.

The decision also affirms the A3 senior unsecured ratings on bonds and sukuk issued under Khazanah’s $10 billion global medium-term note program, $5 billion sukuk program, and trust certificates of Dua Capital Ltd.

Moody’s highlighted Khazanah’s conservative financial strategy, stable leverage, and strong access to funding as key factors underpinning the affirmation. “The ratings reflect Khazanah’s critical role as Malaysia’s sovereign wealth fund, its close ties with the government, and its sizeable stakes in strategic national assets,” said Maisam Hasnain, Moody’s Vice President and Senior Credit Officer.

Khazanah’s A3 Rating

Khazanah’s net asset value rose to MYR104 billion in 2024 from MYR85 billion in 2023, supported by strong public market investments and lower debt, reducing market value-based leverage to 29% from 33%. While Moody’s expects leverage to edge up to around 32% in the next 12–18 months due to fresh investments, the ratio remains within Khazanah’s baa3 parameters.

Moody’s noted that Khazanah’s liquidity needs, including scheduled debt maturities, will exceed internal cash generation. However, the fund’s demonstrated ability to access external funding, including a recent $500 million exchangeable bond issuance, tempers these risks.

An upgrade remains unlikely without an improvement in Malaysia’s sovereign rating. Conversely, a downgrade could occur if Khazanah undertakes aggressive debt-funded investments, suffers deteriorating dividend flows, or if the government reduces its support.

The stable outlook reflects Moody’s confidence that Khazanah will maintain prudent financial policies while benefiting from continued strong government backing.

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