Moody’s Affirms Khazanah’s A3 Rating with Stable Outlook Amid Financial Challenges”

Moody’s Ratings has affirmed Khazanah Nasional Berhad‘s A3 long-term issuer rating and baa3 Baseline Credit Assessment (BCA), with a stable outlook. This includes the A3 senior unsecured ratings on its bonds, sukuk, and trust certificates.

The stable outlook reflects expectations of steady income from its investment portfolio, conservative financial policies, and strong access to funding. Khazanah’s rating benefits from expected support from the Malaysian government, its 100% ownership by the government, and its role in national wealth and socioeconomic objectives.

Khazanah’s A3 Rating

Challenges include portfolio geographic concentration and market volatility. Khazanah’s financial profile is anticipated to remain stable, with a focus on maintaining a conservative leverage ratio.

“We estimate that Khazanah’s internal cash sources will be insufficient to cover its projected cash uses.

This is primarily due to scheduled debt maturities over the next 12-24 months, which include revolving credit facilities that get rolled over each year. Nonetheless, the company’s strong access to external funding tempers its liquidity risk, as demonstrated by its recent issuance of $1 billion in US dollar bonds and sukuk in August,” says Moody’s.

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