• PRESS RELEASES

RAM Ratings reaffirms AAA ratings of Premium Commerce’s Notes Series 2015-A and 2016-A

Published on 14 Dec 2020.

Share Tweet Email

RAM Ratings has reaffirmed the AAA/Stable ratings of Premium Commerce Berhad’s (PCB or the Issuer) Class A and Class B Notes under the respective Notes Series 2015-A and 2016-A.

Notes Series 2015-A

Rating/Outlook

Rating Action

Issued Amount
(RM mil)

Outstanding Amount^
(RM mil)

OC Ratio^

Class A Notes

AAA/Stable

Reaffirmed/

Reaffirmed

166.0

2.0

996.43%

Class B Notes

AAA/Stable

Reaffirmed/

Reaffirmed

5.0

5.0

213.27%

Class C Notes

Not rated

-

10.0

10.0

 

Notes Series 2016-A

Rating/ Outlook

Rating Action

Issued Amount
(RM mil)

Outstanding Amount^
(RM mil)

OC Ratio^

Class A Notes

AAA/Stable

Reaffirmed/

Reaffirmed

204.0

81.0

31.87%

Class B Notes

AAA/Stable

Reaffirmed/ Reaffirmed

4.5

4.5

24.93%

Class C Notes

Not rated

-

11.25

11.25

-

OC = overcollateralisation, including balances in Collection Account
^ As at 31 August 2020

The ratings reflect the strong credit support afforded by the OC ratios, largely attributed to the overall satisfactory loss performance of the underlying portfolio of the respective Notes Series. Faster than assumed deleveraging of the transactions via their pass-through liability repayment structure further adds to the buildup of credit support. During the review period, a respective RM17 mil and RM40 mil of principal on the Class A Notes of Notes Series 2015-A and 2016-A were prepaid early. The ratings address only credit risks and not the risk of early redemption associated with these debt facilities. 

TC Capital Resources’ performance as the Servicer of the transaction remains satisfactory. In an effort to help customers affected by the Covid-19 crisis, the Servicer allowed selected hirers to defer 50%-100% of their monthly instalments for April to June 2020 for a period of three months. Although we observed a gradual improvement in average monthly collections – which suggests that affected hirers have, for the most part, caught up on deferred instalments – TC Capital Resources has facilitated the restructuring of some accounts. These, however, constituted only about 2% of the total remaining principal balance of the respective notes series as at end-August 2020. 

Going forward, although cashflow recovery might be slower, given various forms of the Movement Control Order and the still-evolving situation amid the pandemic, the available OC provides a sufficient buffer against cashflow deterioration in ensuring timely repayment of coupon and principal obligations for the remaining tenure of the bonds.

The two transactions involve the securitisation of hire-purchase receivables originated by TC Capital Resources under PCB’s RM2 bil Asset-Backed MTN Programme. TC Capital Resources is the hire-purchase captive financing arm of Tan Chong Motor Holdings Berhad, which in turn – via Tan Chong & Sons Motor Company – holds the sole right to assemble and distribute Nissan and Ultimate Dependability vehicles in Malaysia.

 

Analytical contact
Liew Kar Ling
(603) 3385 2586
karling@ram.com.my

Media contact 
Padthma Subbiah
(603) 3385 2577
padthma@ram.com.my

 

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.

Published by RAM Rating Services Berhad
© Copyright 2020 by RAM Rating Services Berhad



Rating Rationale: Premium Commerce Berhad Notes Series 2015-A

Rating Rationale: Premium Commerce Berhad Notes Series 2016-A

Ratings on Premium Commerce Berhad 2015-A

Loading...