MARC Ratings has revised its rating methodology on debt securities/sukuk issued by Malaysian Real Estate Investment Trusts (M-REITs). The revision does not represent fundamental shifts in MARC Ratings’ approach on the rating methodology applied to M-REITs but is intended to provide enhanced clarity and in-depth guidance on the rating agency’s assessment.

MARC Ratings has provided further elaboration on its assessment criteria regarding the management of the M-REITs, encompassing the M-REIT manager’s external and internal business growth policies, where applicable. Furthermore, the revised rating methodology now clearly defines the inclusion of a sub-factor assessment on the relationship with the sponsor of an M-REIT, if relevant. Additionally, MARC Ratings also provides explicit guidance on the overcollateralisation metric that is viewed to provide a reasonable buffer against debt/financing undertaken by the M-REIT being assessed. The updated methodology also includes enhancements to the overall structure and language for greater clarity and usability.

MARC Ratings’ revised methodology supersedes the previous assessment methodology and can be accessed on MARC’s corporate website here.