Malaysiakini NEWS

Aid to Felda is credit negative, says Moody's

Bernama  |  Published:  |  Modified:

Moody's Investors Service Ltd views the government financial aid totalling RM6.2 billion to Felda as credit negative.

The rating agency, however, noted that with the cash balance shrinking at Felda, the state-owned agency is unlikely to be able to meet its debt obligations without the government's assistance.

Moody's said the assistance will raise the government’s debt burden by 0.3 percent of gross domestic product (GDP) to 56.0 percent in 2019, substantially higher than the median debt ratio for A-rated sovereigns of 37.8 percent.

"In our estimates, we include the debt of state-owned investment fund 1MDB and RM20 billion of funding provided to Tabung Haji, the state-owned pilgrimage fund, at the end of last year through an asset-backed sukuk.

“Higher debt burden will weigh on Malaysia's debt affordability, particularly because the share of revenue to GDP at 16.3 percent in 2018, while interest payments account for 13.3 percent of revenue, significantly higher than the A-rated median of 4.0 percent,” said Moody's in a statement today.

- Bernama

Share this story

OR

Welcome back,

Your subscription expires on
  

Your subscription will expire soon, kindly renew before
  

Your subscription is expired
  Click here to renew

You are not subscribed to any subscription package
  Click here to subscribe now

Any questions?
  Email: [email protected]
  Call: +603-777-00000

Renew