Rating Action: Moody's assigns A3 rating to Malaysia's international sovereign sukuks

Moody's Investors Service ("Moody's") has today assigned a senior unsecured rating of A3 to the proposed US dollar-denominated trust certificates ("sukuks") with maturities of 10 and 30 years to be issued by Malaysia Wakala Sukuk Berhad ("the issuer"), a special purpose vehicle (SPV) established by the Government of Malaysia.

RATINGS RATIONALE

The A3 rating assigned to the sukuks are at the same level as the long-term local-currency and foreign-currency issuer ratings of the Government of Malaysia, as the sukuk holders will (i) effectively be exposed to the Government of Malaysia's senior unsecured credit risk; (ii) not be exposed to the risk of performance of the portfolio assets relating to the certificates; (iii) will not have any preferential claim or recourse over the trust assets as certificate holders cannot sell or dispose any trust assets except as expressly provided for under the transaction documents; and (iv) only have rights against the Government of Malaysia, ranking pari passu with other senior unsecured obligations as provided in the transaction documents. Legal opinions have also confirmed legal, binding and enforceable obligations for the Government of Malaysia.

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