MARC Ratings has maintained its preliminary AA-IS rating on Lebuhraya DUKE Fasa 3 Sdn Bhd’s (DUKE 3) proposed Sukuk Murabahah Programme (up to RM5.5 billion) and AA-IS rating on DUKE 3’s Sukuk Wakalah Programme (up to RM3.64 billion), both with a stable outlook. The preliminary AA-IS rating was assigned to the Sukuk Murabahah on 14 August 2025 and the AA-IS rating on the Sukuk Wakalah was affirmed concurrently. Issuance of the Sukuk Murabahah — and the related refinancing of the Sukuk Wakalah — was delayed pending government approval. Following approvals from the Ministry of Works and Ministry of Finance on 30 January 2026, DUKE 3 expects to issue the Sukuk Murabahah and concurrently refinance the Sukuk Wakalah on 23 February 2026. If delayed, sponsor Ekovest Berhad has provided a letter of undertaking to cover any shortfall in the Finance Service Reserve Account, ensuring the RM110.7 million Sukuk Wakalah obligations due on 23 February 2026 are met. Based on 1QFY2026 results, the rating agency assesses Ekovest to have sufficient cash and investment resources to meet these obligations.
The Sukuk Murabahah comprises two tranches: Sukuk Murabahah A (RM4.0 billion) to exchange the Sukuk Wakalah, covering accrued profit and mark-to-market adjustments, and Sukuk Murabahah B (estimated at RM755 million), issued over FY2026-FY2034 to partially fund profit payments and maintain a minimum finance service coverage ratio of 1.25x. The exchange is not a distressed transaction, as Sukuk Wakalah holders will receive Sukuk Murabahah with no loss of total return; the Sukuk Wakalah will be cancelled and its rating withdrawn.
The sukuk restructuring is in response to a three-year delay in Setiawangsa-Pantai Expressway’s (SPE) opening, partly due to road alignment issues and pandemic-related mobility restrictions, which strained cash flows and debt servicing. Extending the Sukuk Murabahah’s maturity better aligns repayments with projected traffic ramp-up. The Sukuk Murabahah is fully amortising with a back-loaded, laddered schedule: principal repayments start in FY2038, with only profit payments for the first 12 years (FY2026-2037), supported by Sukuk Murabahah B to stabilise cash flows. The rating also reflects SPE’s strategic location in mature catchments, tempered by high leverage and risks from toll hike deferrals and delayed compensation.
Since fully opening on 3 November 2023, traffic on SPE has steadily increased, hitting roughly 2.6 million vehicles in December 2025 — double the volume in November 2023. Annual average daily traffic for FY2025 (July 2024 to June 2025) was 68,128 vehicles, broadly in line with the 2025 traffic study by Perunding Trafik Klasik Sdn Bhd. In the most recent six-month period (July 2025 to December 2025), average daily traffic rose by approximately 16% to 78,698 vehicles. Continued growth is expected, supported by a stable commuter base representing approximately 97% of total traffic.
As of end-December 2025, total borrowings were approximately RM4.0 billion (Sukuk Wakalah and RM560 million government Reimbursable Interest Assistance (RIA)). Following the Sukuk Murabahah issuance, borrowings are expected to peak at around RM5.4 billion (including RIA) in FY2035-FY2037, then decline with amortisation, reaching final maturity in FY2053. The concession agreement ends on 5 August 2069, with a 16-year tail available for refinancing, if required.