Published on 28 Sep 2022.
RAM Ratings has reaffirmed the AAA/Stable ratings of the Class A and Class B Notes under Premium Commerce Berhad’s (PCB or the Issuer) Notes Series 2016-A.
The transaction involves the securitisation of hire-purchase receivables originated by TC Capital Resources (TCCR) under PCB’s RM2.0 bil Asset-Backed MTN Programme. TCCR 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.
Notes Series 2016-A
Rating / Outlook
Class A Notes
Class B Notes
Class C Notes
The rating actions reflect the strong credit support afforded by the overall satisfactory asset performance of the underlying portfolio backing Notes Series 2016-A (2016-A Pool). The collaterals comprising balances in Collection Account and outstanding hire-purchase receivables provide the transaction with strong credit protection that commensurate with the AAA rating.
During the 12-month period ending July 2022, the cumulative net default rate stayed below our base assumption while the average monthly prepayment rate was still above our low prepayment stress assumption. The delinquency profile improved as TCCR continued to closely monitor borrower repayment behaviour, providing restructuring plans on a case-by-case basis if required. While some 9.98% of the 2016-A Pool’s total remaining principal balance of receivables had been restructured as at end-July 2022 (end-September 2021: 7.18%), credit support built up prior to the Covid-19 pandemic helped cushion the adverse effect of reduced instalment amounts due under these accounts.
As a result, RM26.0 mil of the Class A Notes was prepaid during the same period. Considering TCCR’s proven servicing ability during the health crisis, we believe 2016-A Pool will continue to perform within our assumptions.
Liew Kar Ling
(603) 3385 2586
Tan Han Nee
(603) 3385 2529
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Ratings on Premium Commerce Berhad 2016-A