Published on 23 Nov 2020.
RAM Ratings has assigned final ratings of AAA/Stable and AA2/Stable to Zamarad Assets Berhad’s (the Issuer) Tranche 5 RM85 mil Class A Sukuk and RM15 mil Class B Sukuk, respectively. The Tranche 5 Sukuk is the fifth issuance under Zamarad’s RM2 bil Sukuk Murabahah Programme (the Programme), sponsored by RCE Marketing Sdn Bhd (RCEM).
As with previous issuances, the Tranche 5 Sukuk will be collateralised by personal financing (PF) facilities extended to civil servants, originated by RCEM through its business partners. The PF facilities will be repaid 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 historically low attrition rate of civil servants reduces the transaction’s exposure to credit risks of the customers as long as the customers remain in active service.
In assigning the 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 28 October 2020. The RM100 mil rated Tranche 5 Sukuk will be backed by an outstanding principal balance of RM103.85 mil based on the portfolio cut-off date of 31 August 2020 and a required prefunded cash reserve of RM1.67 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 tranches in the Programme.
Teoh Tze Yit
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Ratings on Zamarad Assets Berhad