Published on 12 Aug 2020.
RAM Ratings has reaffirmed the AAA/Stable rating of the First Notes Series under AmMortgage One Berhad’s (AmMortgage One or the Issuer) RM339.38 mil MTN. The MTN is secured against staff mortgages originated by Telekom Malaysia Berhad (TM or the Originator) under AmMortgage One’s RM1 billion MTN Programme, of which RM4.98 mil remained outstanding as at end-June 2020.
The reaffirmation of the rating reflects the robust collateral coverage supporting the transaction. Against the outstanding RM7.70 mil of the First Notes Series as at end-March 2020, the remaining portfolio principal balance of RM46.93 mil along with a cash balance and permitted investments amounting to RM3.89 bil provide an overcollateralisation (OC) ratio of 560.85% (end-March 2019: 197.41%). The improved collateral cover is attributed to the faster than expected deleveraging of the transaction through its pass-through structure, driven by the better than expected default performance of the securitised portfolio. Based on the average monthly collection sum of RM0.8 mil, we envisaged that the First Notes Series will be fully redeemed in less than a year, well ahead of its Legal Maturity Date.
We remain cognisant of the transaction’s exposure to a single counterparty, TM, the ultimate paymaster of the borrowers’ salaries and the obligor of TM Mortgage Programme fee payments, LTV Compensation and LTV Excess Refunds due to the Issuer. Nevertheless, we believe this risk is more than adequately addressed by TM’s superior credit profile (TM’s Islamic facilities are accorded a credit rating of AAA/Stable – the highest on RAM’s rating scale). At this juncture, the more than ample collateral cover also allows the transaction to withstand significant deterioration in TM’s credit rating and asset quality.
Teoh Tze Yit
(603) 3385 2531
(603) 3385 2577
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Ratings on AmMortgage One Berhad