MARC RATINGS AFFIRMS RATINGS ON PUTRAJAYA HOLDINGS' SUKUK PROGRAMMES

MARC Ratings has affirmed its ratings on Putrajaya Holdings Sdn Bhd's (PJH) sukuk programmes as follows:

   - RM1.0 billion 20-year Sukuk Wakalah Programme (due in 2041) at AAAIS
   - RM370.0 million Sukuk Musharakah Programme (due in 2030) at AAAIS; and
   - RM3.0 billion Sukuk Musharakah Programme (due in 2032) at AAAIS

The outlook for all ratings is stable.

The ratings affirmation is premised on the credit strength of the Malaysian government as the principal lessee of government buildings in Putrajaya under individual long-term lease-and-sublease agreements with PJH. The sizeable rental income stream is sufficient to meet the financial obligations under the rated programmes. PJH's property development track record and the credit strength of its government-linked major shareholders underpin the ratings. Aside from government buildings, PJH has undertaken residential and commercial property development, mainly in Putrajaya, to complement the overall development of the federal administrative capital.

In 2024, PJH continued to receive annual sublease rental income (including from commercial buildings) of about RM1.4 billion, which is more than adequate to meet principal repayments of RM530.0 million in FY2025 and RM470.0 million in FY2026. Total revenue remained around RM2.0 billion, with the property development segment contributing RM239.2 million in 2024 (2023: RM234.1 million). Borrowings declined to RM2.0 billion in 2024 from RM2.7 billion in 2023, from repayments made under its various sukuk programmes. As a result, the group's debt-to-equity (DE) ratio improved to 0.19x (2023: 0.26x). MARC Ratings notes that a significant proportion of the rated programmes' outstanding issuances are scheduled to mature in 2026, which will continue to reduce the group's borrowings. The rating agency notes that the group will also continue its efforts to monetise completed inventories, which s