RAM Ratings upgrades Class B under Zamarad’s Tranche 3 and 5 sukuk, reaffirms ratings of Zamarad’s Tranche 2 sukuk and Al Dzahab’s Tranche 1 and 2

Published on 05 Oct 2022.

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RAM Ratings has upgraded the ratings of Class B under Tranche 3 and Tranche 5 of Zamarad Assets Berhad’s Sukuk Murabahah while reaffirming the ratings of other sukuk under Tranche 2, Tranche 3 and Tranche 5. 

We have also reaffirmed the ratings of all classes under Al Dzahab Assets Berhad’s Tranche 1 and 2 Sukuk Murabahah (see table). Zamarad and Al Dzahab are both special-purpose vehicles incorporated to undertake the securitisation of personal financing (PF) facilities extended to civil servants, originated through the business partners of RCE Marketing Sdn Bhd (RCEM or the Originator).

Sukuk Murabahah

Outstanding Amount^
(RM mil)

OC Ratio^


Rating Action

 Al Dzahab Tranche 1

Class A





Class B





Total rated





 Al Dzahab Tranche 2

Class A





Class B





Total rated





 Zamarad Tranche 2

Class A 70.0 67.29 AAA/Stable Reaffirmed
Class B 20.0 30.12 AAA/Stable Reaffirmed
Total rated 90.0      

 Zamarad Tranche 3

Class A 85.0 56.09 AAA/Stable Reaffirmed
Class B 20.0 26.36 AAA/Stable Upgraded from AA1/Positive
Total rated 105.0      

 Zamarad Tranche 5

Class A 70.0 48.32 AAA/Stable Reaffirmed
Class B 15.0 22.15 AAA/Stable Upgraded from AA2/Positive
Total rated 85.0      

OC = overcollateralisation (with cash)
^ As at 30 June 2022

The upgrades are based on the better than assumed loss performance of the portfolios backing the respective tranches, which results in stronger credit support, commensurate with the higher ratings.  The reaffirmed ratings continue to reflect the level of credit support corresponding to AAA ratings.

No major deterioration was observed in the securitised portfolios’ delinquency and default performance during the review period. Given the non-discretionary salary deductions used to repay the PF and the low attrition rate of civil servants even during pandemic-induced lockdowns, we believe delinquency and default rates will be sustained at current levels. This is despite an increase in the Originator’s impairment allowances and the written-off amount for 1Q FY Mar 2023 compared to the corresponding quarter the previous year owing to increased resignations and early retirements in the academic and healthcare sectors during the pandemic. Other than some spikes in prepayment during the review period, the average prepayment rates stayed well within our stressed assumptions. 

The proposed enactment of the Consumer Credit Act could see RCEM becoming subject to tighter regulations. Although not under Bank Negara Malaysia’s purview, the Originator’s underwriting standards are guided by the central bank’s lending guidelines. As the rated sukuk tranches are backed by their respective static pools of receivables, they are shielded from the impact of any potential legislation or regulatory actions on the profile of future receivables originated by RCEM.

Effective 1 July 2022, EXP Payment Sdn Bhd (EXP) – a wholly-owned subsidiary of RCE Capital Berhad (RCE Cap) – became the appointed Servicer of the Sukuk Programmes, replacing RCEM. This is to streamline the RCE Cap group’s collection and recovery operations under EXP. The replacement servicing agreement executed for this purpose saw no variation in the roles and responsibility or remuneration of the Servicer. The agreement stipulates that EXP shall remain a subsidiary of RCE Cap so long as the Sukuk remains outstanding. We are of the view that the change in servicer has no implication on the ratings.


Analytical contacts
Kaylee Chiah
(603) 3385 2515

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 2022 by RAM Rating Services Berhad

Rating Rationale: Al Dzahab Assets Berhad’s Tranche 1

Rating Rationale: Al Dzahab Assets Berhad’s Tranche 2

Rating Rationale: Zamarad Assets Berhad Tranche 2

Rating Rationale: Zamarad Assets Berhad Tranche 3

Rating Rationale: Zamarad Assets Berhad Tranche 5

Ratings on Al Dzahab Assets Berhad