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RAM Ratings assigns final rating to maiden securitisation sponsored by Axiata’s fintech arm, Boost , to be issued via Salvare Assets Bhd

Published on 16 Mar 2022.

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RAM Ratings has assigned an A1/Stable rating to the RM39 mil Senior Class A Notes to be issued by Salvare Assets Bhd (Salvare or the Issuer) under a 10-year RM300 mil Medium-Term Notes (MTN) programme. The issue size has increased from the RM17 mil Senior Class A Notes in our preliminary rating assessment in view of a larger pool of receivables securitised. Concurrently, we have withdrawn the preliminary A3/Stable rating of the RM1 mil Senior Class B Notes following a change in debt structure.

First Tranche MTN

Rating/
Outlook

Issue Amount
(RM mil)

Coupon Rate (%)

Revolving Period*

Maturity Date*

OC Ratio at Issuance^ (%)

Senior Class A

A1/Stable

39

7.20%

15 months

30 months

36.46%

Redeemable Preference Shares

-

14

 

-

-

-

Total

 

53

 

 

 

 

* From issue date
OC = overcollateralisation
^The OC ratio for the First Tranche MTN will vary over time due to the transaction’s revolving feature
 

Salvare is a trust-owned, special-purpose vehicle incorporated to undertake the issuance of MTN to facilitate the purchase of eligible receivables from Boost Credit (formerly known as Aspirasi). Boost Credit specialises in providing financing and insurance to individuals and micro, small and medium-size enterprises by leveraging off Axiata Group Berhad’s business connections and its fintech background.

In assigning the final rating, we are satisfied that all relevant transaction documents reviewed substantially reflect the intended transaction structure represented during the preliminary rating exercise. We have considered the credit enhancement required for the assigned rating following a minor change in the eligibility criteria, the larger issuance size and securitised portfolio, coupon rate and debt structure and legal and tax opinions. 

Based on the cut-off date of 31 December 2021, the RM53 mil of securitised receivable portfolio backing the First Tranche MTN comprised Invoice Financing by Boost Credit (14%), Supply Chain Financing by Boost Credit (41%), CapitalX by Boost Credit (33%), Capital by Boost Credit (1%) and Capital Plus by Boost Credit (11%). Compared to the provisional portfolio during the preliminary rating exercise, the composition of receivables has shifted slightly towards shorter-tenure products (to 12% from 21%), mirroring the growth trend in Boost Credit’s loan book. We find Boost Credit’s performance to be within our expectations (see final rationale for further details).

Upon issuance, RAM will maintain surveillance of the transaction via monthly transaction performance reports prepared by the Servicer and Security Trustee. We will keep the rating under surveillance as long as there are outstanding rated notes under the programme.

 

Analytical contacts
Jack Kwan
(603) 3385 2532
jack@ram.com.my

Lim Chern Yit
(603) 3385 2528
chernyit@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 2022 by RAM Rating Services Berhad



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