MARC Ratings has assigned a preliminary rating of AA-IS to Lebuhraya DUKE Fasa 3 Sdn Bhd’s (DUKE 3) proposed Sukuk Murabahah Programme (Sukuk Murabahah) and affirmed its AA-IS rating on the Sukuk Wakalah Programme of up to RM3.64 billion (Sukuk Wakalah), both with a stable outlook.
The Sukuk Murabahah will be issued in exchange for the Sukuk Wakalah, covering accrued profit and any mark-to-market adjustments. MARC Ratings does not consider this a distressed exchange, as holders of the Sukuk Wakalah will receive the Sukuk Murabahah with no reduction in total return. The Sukuk Murabahah is currently pending approval from the government and undergoing due diligence. The rating on the Sukuk Wakalah will be withdrawn once it is cancelled following the exchange.
The sukuk restructuring is driven by a delay of approximately three years in the opening of Setiawangsa-Pantai Expressway (SPE), due partly to road alignment issues and COVID-related restrictions, which strained cash flows and debt servicing. The Sukuk Murabahah, with extended maturity, improves cash flow alignment. The highway has now been operational for 20 months, with traffic volumes trending upwards.
The assessment reflects a manageable, fully amortising sukuk repayment profile aligned with expected traffic growth. The Sukuk Murabahah’s longer tenure and back-loaded, laddered repayment schedule allow for time to build traffic and stabilise cash flows. The rating also considers SPE’s strategic location in mature catchment areas but is constrained by a leveraged capital structure as well as risks from toll hike deferrals and delayed compensation.
Since fully opening on 3 November 2023, traffic has shown steady growth. In June 2025, total traffic reached approximately 2.2 million vehicles — twice the volume in November 2023. In 2HFY2025 (January to June 2025), average daily traffic (ADT) rose 11.4% to 71,819 vehicles, up from 64,497 in the previous period (July to December 2024). For the full FY2025 (July 2024 to June 2025), annual ADT was 68,128, aligning with projections from the 2024 traffic study. Looking ahead, traffic is expected to continue its upward trajectory over the coming years, supported by a stable commuter base that currently accounts for approximately 97% of total volume.
As of end-June 2025, total borrowings were approximately RM4.0 billion, comprising the Sukuk Wakalah and a RM560 million Reimbursable Interest Assistance. With the Sukuk Murabahah issuance, borrowings are expected to increase over an extended period before declining gradually starting FY2038 with repayments. The concession agreement ends on 5 August 2069, with a 16-year tail period available for potential refinancing support.
DUKE 3’s liquidity position is modest, with approximately RM72.0 million in cash and cash equivalents projected by end-January 2026, compared to RM110.7 million due under the Sukuk Wakalah in February 2026. The Sukuk Murabahah is expected to be finalised by December 2025; however, in the event of a delay, sponsor Ekovest Berhad has committed — via a letter of undertaking — to cover any shortfall in the Finance Service Reserve Account to ensure the February 2026 debt service is met.