RAM Ratings reaffirms AAA/Stable ratings of Cagamas MBS’s CMBS 2005-2, CMBS 2007-1-i and CMBS 2007-2

Published on 30 Jun 2022.

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RAM Ratings has reaffirmed the AAA/Stable ratings of Cagamas MBS Berhad’s residential mortgage-backed securities (CMBS 2005-2, CMBS 2007-1-i and CMBS 2007-2).

Cagamas MBS is a limited-purpose entity incorporated to securitise government staff housing loans (GSHL) and government staff Islamic home financing (GSIHF) facilities. The GSHL and GSIHF are repaid through non-discretionary direct deductions from civil servant salaries and pensions by Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA). This reduces exposure to the credit risks of the customers.


Bond / Sukuk Issue

Outstanding Issue Amount
(RM mil)

OC Ratio (%)


Rating Action

CMBS 2005-2


(as at end-June 2021)



CMBS 2007-1-i


(as at end-October 2021)



CMBS 2007-2


(as at end-August 2021)



OC = overcollateralisation
# RM320 mil out of the RM610 mil was fully redeemed on 27 May 2022.


The rating actions reflect the better than assumed loss performance of the portfolios backing the respective issuances and progressive transaction deleveraging which further strengthened the asset covers, as seen in the robust and improved OC ratios. The available OC is more than sufficient to cover losses assumed in an AAA rating stress scenario. 

The delinquency profiles of the respective portfolios remained stable during the review period. Monthly prepayment rates averaged lower than our assumption, compensated by a satisfactory default performance. Specifically for CMBS 2005-2 and CMBS 2007-2, the compounded impact of the aforesaid factors over the years put the transactions in a fully cash-collateralised position. Accumulated reserves in both transactions amply cover all outstanding principal and remaining profit obligations up to December 2025 (CMBS 2005-2) and August 2027 (CMBS 2007-2) when the last maturing tranches mature. 

LPPSA demonstrated satisfactory servicing capabilities during the review period despite disruptions arising from the Covid-19 pandemic. While it offered relief measures such as a six-month moratorium on repayments under Skim Bantuan Projek Perumahan Lewat Siap (application period: 4 February 2022 to 31 December 2022) and a three-month deferral under Skim Bantuan Khas Banjir (application period: 15 January 2022 to 30 April 2022), only 0.4% of LPPSA’s overall portfolio came under forbearance as at end-April 2022.


Analytical contacts
Liew Kar Ling
(603) 3385 2586

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 2022 by RAM Rating Services Berhad

Rating Rationale: Cagamas MBS Berhad CMBS 2005-2

Rating Rationale: Cagamas MBS Berhad CMBS 2007-1-i

Rating Rationale: Cagamas MBS Berhad CMBS 2007-2

Ratings on Cagamas MBS Berhad CMBS 2005-2