RAM Ratings: Corporate Bond Financing to Moderate?

 

Corporate bond financing is expected to moderate in 2026 from the record-high issuance seen, RAM Ratings said. The ratings agency projects gross issuance of between RM130 billion and RM140 billion this year, down from a record RM174.4 billion raised by 205 issuers in 2025. This projection is still above the historical average of about RM122 billion recorded between 2017 and 2024, RAM Ratings noted. In 2024, gross issuance stood at RM124.2 billion from 171 issuers.

 

 

Issuances in 2026 will also be supported by financial institutions’ capital-raising plans. The rating agency expects foreign investor demand for Malaysian bonds to remain healthy this year, underpinned by resilient domestic economic conditions and prospects for global monetary easing, which should enhance the yield differential in favour of ringgit-denominated bonds. 

2025 saw a sharp jump in foreign net inflows to RM25.6 billion, compared with RM4.8 billion in 2024 — the largest since 2021 — concentrated mainly in April (RM10.2 billion) and May (RM13.4 billion) amid expectations of US Federal Reserve (Fed) rate cuts. 

Given increasing signs of economic weakness in the US, RAM expects the Fed to cumulatively reduce rates by at least 50 bps by year end. The overnight policy rate (OPR) will stay unchanged at 2.75% for 2026, Fed cuts will help further improve the attractiveness of Malaysian bonds. 

Meanwhile, gross issuance of Malaysian Government Securities (MGS) and Government Investment Issues (GII) is projected to rise to between RM175 billion and RM185 billion this year, from RM168.5 billion in 2025, driven by increased refinancing needs for maturing debt. However, net supply in 2026 is expected to be lower due to a smaller government deficit financing requirement. The scenario in one of caution by issuers. It remains for banks to do due diligence adequately such that court action like in MEX II Sukuk will not surface. If there are too many court or legal tussles, bond issuance will be impacted.

 

Reference:

RAM Ratings: Corporate bond financing to moderate after record high issuance in 2025, Syafiqah Salim / theedgemalaysia.com, 20 Jan 2026