Published on 04 Sep 2020.
RAM Ratings has assigned final ratings of AAA/Stable and AA2/Stable to Zamarad Assets Berhad’s (the Issuer) Tranche 4 RM95 mil Class A Sukuk and RM25 mil Class B Sukuk, respectively. The Tranche 4 Sukuk is the fourth issuance under Zamarad’s RM2 bil Sukuk Murabahah Programme (the Programme).
The Programme is RCE Marketing Sdn Bhd’s (RCEM) fifth debt capital market programme. As with previous issuances, the Tranche 4 Sukuk will be collateralised by personal financing facilities extended to civil servants, originated by RCEM through its business partners. These will be repaid primarily via non-discretionary salary deductions processed by Angkatan Koperasi Kebangsaan Malaysia Berhad and EXP Payment Sdn Bhd (the exclusive agent for Yayasan Ihsan Rakyat’s Accountant General’s Department of Malaysia Code). The salary deduction feature coupled with the job security enjoyed by civil servants reduces the transaction’s exposure to the customer’s credit risks as long as the customer remains in active service.
In assigning final ratings, we have reviewed all relevant transaction documents as well as assumptions applied and find them to be in line with our expectations when we assigned the preliminary ratings, published on 10 August 2020. The RM120 mil of Tranche 4 Sukuk will be backed by an outstanding principal balance of RM122.8 mil, based on the portfolio cut-off date of 31 May 2020, and a required prefunded cash reserve of RM2.0 mil in the Finance Service Reserve Account at closing.
RAM will monitor the transaction’s performance on a regular basis via monthly performance reports prepared by the Servicer and the Trustee. We will keep the ratings under surveillance as long as there are outstanding Class A or Class B sukuk under Tranche 4.
Liew Kar Ling
(603) 3385 2586
(603) 3385 2577
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Ratings on Zamarad Assets Berhad