RAM Ratings reaffirms ratings of RCE Marketing-sponsored Al Dzahab’s Tranche 1 and 2 Sukuk

Published on 03 Nov 2021.

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RAM Ratings has reaffirmed the AAA/Stable ratings of the Class A and Class B Notes under Al Dzahab Assets Berhad’s (the Issuer) respective Tranches 1 and 2 Sukuk Murabahah (see table below). Al Dzahab is a special-purpose vehicle, incorporated to undertake the securitisation of personal financing (PF) facilities originated through the business partners of RCE Marketing Sdn Bhd (RCEM or the Originator).

Each sukuk tranche is backed by its own discrete portfolio of PF receivables from civil servants. The receivables are paid through non-discretionary salary deductions processed by the Accountant General’s Department and Angkatan Koperasi Kebangsaan Malaysia Berhad (Angkasa), which reduces the transaction’s exposure to the customers’ credit risks, as long as they remain in active service.

Sukuk Murabahah

Outstanding Amount*

(RM mil)

OC Ratio (%)


Rating Action

Tranche 1

Class A





Class B





Total rated





Tranche 2

Class A





Class B





Total rated





OC = overcollateralisation (with cash)
* Tranche 1: as at end-September 2021; Tranche 2: as at end-May 2021


The rating actions reflect the better than assumed loss performance of the portfolios backing the respective tranches and the resultant strong credit support that can more than cover losses assumed in an AAA rating stress scenario. Specifically for Tranche 1, accumulated reserves up to end-September 2021 amply cover all outstanding principal and remaining profit obligations of the rated sukuk up to the respective legal maturity dates, with the last scheduled maturity on 20 December 2024. Under the transaction, Al Dhazab can choose to prepay all outstanding rated sukuk, in whole, after the end of fifth year from the issue date and up to the relevant legal maturity date. The default experience of the portfolios generally outperformed our base assumptions. Other than some spikes in prepayments observed during the review period, the average prepayment rates stayed well within our stressed assumptions. The elevated prepayments were prompted by backlog in early settlements as well as older accounts refinancing at higher limits given higher salaries, and are seen to be temporary in the short term. 

Despite various mobility curbs, we observed no major deterioration in the Tranche 2 portfolio’s delinquency and default profile, thanks to the non-discretionary salary deductions that underpin the repayment of the PF facilities, and the stable attrition rate in the civil sector. RCEM had granted payment assistance for less than 0.1% of outstanding PF facilities, even with the stricter Movement Control Order 3.0. PF facilities under relief are not eligible for securitisation under the sukuk programme.

Analytical contacts
Joel Thum
(603) 3385 2517

Tan Han Nee
(603) 3385 2529

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 2021 by RAM Rating Services Berhad


Rating Rationale: Al Dzahab Assets Berhad Tranche 1

Rating Rationale: Al Dzahab Assets Berhad Tranche 2

Ratings on Al Dzahab Assets Berhad