RAM Ratings reaffirms AAA rating of AmMortgage One’s First Notes Series

Published on 12 Aug 2020.

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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. 


Analytical contact
Teoh Tze Yit
(603) 3385 2531

Media contact
Padthma Subbiah
(603) 3385 2577


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

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