MARC RATINGS ASSIGNS PRELIMINARY RATING OF AAAIS TO PNB MERDEKA VENTURES' PROPOSED SUKUK WAKALAH PROGRAMME OF UP TO RM6.0 BILLION

MARC Ratings has assigned a preliminary rating of AAAIS to PNB Merdeka Ventures Sdn. Berhad's (PNBMV) proposed Merdeka Sukuk Wakalah Programme of up to RM6.0 billion with a stable outlook.

The assigned rating is equalised to Permodalan Nasional Berhad's (PNB) corporate credit rating of AAA/Stable which is based on publicly available information. The rating equalisation is premised on the unconditional and irrevocable rolling guarantee from PNB to cover any shortfall in principal repayments and profit payments on the proposed Sukuk Wakalah.

PNBMV is wholly owned by PNB and was set up to undertake the Merdeka 118 development on about 40 acres in the vicinity of Stadium Merdeka and Stadium Negara, comprising several components - Merdeka 118, a single tower with 84 floors of office space, a 17-floor luxury hotel and a 3-floor observation deck; a 7-floor retail mall, adjacent to the tower; and two residential towers as well as one serviced apartment building. PNBMV is also the landowner and custodian of Stadium Merdeka and Stadium Negara, both of which are listed as National Heritage sites. Developed in phases, the Merdeka 118 tower has been completed while construction on the retail mall is slated for completion by 4Q2025. The construction on the residential towers and serviced apartment building has yet to commence.

As at date, about 70% of the 1.64 million sq ft of net lettable area (NLA) has been sub-leased: 40% or 33 floors to Maybank Group, 20% to PNB-related companies, and about 10% to other tenants. The office tower is expected to generate an annual net property income of around RM160.0 million. MARC Ratings notes that under a triple net master lease agreement with PNB, PNBMV is not exposed to the occupancy and operational risks of the tower. PNB will lease the entire 84 floors of office space in the tower and undertake all