RAM Ratings affirms Dynasty Harmony's AA3/Stable issue ratings

RAM Ratings has affirmed the AA3/Stable ratings of Dynasty Harmony Sdn Bhd's RM165 mil Islamic Medium-Term Notes (2018/2033) and RM55 mil Islamic Medium-Term Notes (2025/2036), issued under its RM300 mil Sukuk Programme (2018/2036) (the Sukuk). 

The affirmation is premised on the transaction's stable and predictable cash flows, adequate liquidity and strong debt-servicing indicators, as measured by the subordinated finance service coverage ratio (sub-FSCR) of 2.07 times and finance service coverage ratio (FSCR) of 2.36 times, respectively, as at end-February 2026. The ratings are further supported by restrictive covenants that prohibit shareholder distributions and additional borrowings, which help preserve cash within the transaction structure and enhance sukukholders protection.

Dynasty Harmony is a wholly owned funding vehicle of GFM Services Berhad and a sister company of KP Mukah Development Sdn Bhd (KP Mukah), the concession holder for the Universiti Teknologi MARA campus in Mukah, Sarawak. KP Mukah receives predictable concession income and upstreams dividends to Dynasty Harmony after meeting its operational and financial obligations. As Dynasty Harmony has no operating business of its own, its repayment capacity depends entirely on cash distributions from KP Mukah. The issue ratings are notched down to reflect Sukuk's structural subordination to KP Mukah's senior lender. 

During the review period, timely concession payments and satisfactory campus maintenance by Global Facilities Management Sdn Bhd, another GFM Group subsidiary, enabled KP Mukah to distribute dividends to Dynasty Harmony as scheduled. Supported by healthy cash balances and transaction cash retention features, the consolidated sub-FSCR and FSCR are expected to stay above respective rating thresholds of 1.20 times and 1.50 times, even after factoring in payment delays and performance-related deductions. 

The Sukuk's