Salvare Asset Bhd’s revision of transaction key term has no rating impact to the outstanding RM39 mil First Tranche Senior Class A MTN

Published on 09 Nov 2022.

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On 2 November 2022, Salvare Assets Bhd obtained bondholders’ approval to revise a key term of the outstanding RM39 mil First Tranche MTN issued under RM300 mil Medium-Term Notes Programme. The revision entails changing the Cash Purchase Price (CPP) for eligible product to be securitised, to essentially cap the excess overcollateralisation (OC) built up since the issuance of the First Tranche MTN.

Based on RAM's assessment on the performance of the receivables (through monthly status monitor reports), the revision of CPP to RM1.00 for all its products will have no adverse impact to the current First Tranche Senior MTN’s A1/Stable rating. Our cashflow assessment revealed that the OC which stood at 63% as at end-October 2022 provides adequate buffer to withstand the potential losses from the portfolio of receivables under a rapid amortisation scenario that commensurate with the rating. Furthermore, the rapid amortisation triggers i.e. cumulative default of 6% and 2-months rolling average collection rate of 90%, are envisaged to provide adequate safety net for the transaction to halt further purchases during the revolving period and prioritise collections toward repayment of the MTNs. 

At issuance in March 2022, Salvare Assets purchased RM53.2 mil (outstanding principal balance) of Micro, Small and Medium Sized Enterprise (MSME) receivables at an average CPP of RM0.74, resulting in an OC of 36% over the First Tranche Senior A MTN. The initial portfolio 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%). 

The Issuer subsequently purchased another RM30.8 million of MSME receivables in July 2022 with cash collected from the initial receivables, at an average CPP of RM0.75. As at end-October 2022, the portfolio’s performance (i.e. cumulative default and collection rate) remained within the transaction’s rapid amortisation trigger levels. Notably, these had raised the OC for the First Tranche Senior MTNs to 63% from 36% at issuance.

Salvare is a trust-owned, special-purpose vehicle incorporated to undertake the issuance of MTN to facilitate the purchase of eligible receivables from Axiata Digital Capital Sdn Bhd (ADC). In July 2021, Axiata Digital Services Sdn Bhd (ADS) unified its fintech services under the Boost brand, including ADC which houses the micro-financing and micro-insurance businesses under Boost Credit. As the fintech arm of Axiata Group Berhad, Boost’s financial services span across its all-in-one fintech app, merchant solutions, Artificial Intelligence-based lending business, and cross-border payment platform.


Analytical contacts
L Nurisya Abdullah
(603) 3385 2529

Lim Chern Yit
(603) 3385 2528


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