RAM Ratings assigns P1 rating to Cagamas’ proposed Islamic and Conventional Commercial Papers Programmes

Published on 11 Nov 2022.

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RAM Ratings has assigned a P1 rating to Cagamas Berhad’s (the Company) proposed Islamic and Conventional Commercial Papers Programmes with a combined limit of RM20 billion. 

The rating reflects Cagamas’ robust credit metrics and the management’s conservative and prudent business practices, notwithstanding a potential change in business plan over the near to medium term which may entail higher risk. Cagamas is one of the largest issuers of corporate bonds and sukuk in Malaysia. Given the company’s strategic importance as a liquidity provider to the domestic financial system, we believe government support would be forthcoming in the event of financial distress.

Cagamas’ assets mainly comprise loans/financing assets acquired from financial institutions (FIs), the Government of Malaysia and selected corporations on a purchase with recourse (PWR) or purchase without recourse (PWOR) basis. For FY Dec 2021, Cagamas purchased RM13.8 bil of receivables on a PWR basis (2020: RM7.0 bil). About 84% of this exposure was to counterparties with at least AA ratings. Meanwhile, demand for PWOR schemes remains subdued, with no new purchase made in 2021. The credit quality of Cagamas’ PWOR portfolio is viewed to be robust, as seen in its gross impaired loan ratio of 0.54% as at end-December 2021 (end-December 2020: 0.61%), well below the banking industry’s 1.17% for residential property mortgages. As at end-June 2022, about 80% of the PWR exposure was to counterparties with at least AA ratings while the GIL ratio for its PWOR portfolio improved further to 0.45%.

The Company’s total capital ratio (TCR) and common equity tier-1 (CET-1) ratio remain superior at 42.4% and 41.0%, respectively, despite an uptick in credit risk weighted assets from the larger loan/financing base contributed by increased y-o-y PWR purchases. We expect this level of capitalisation to be adequate to support Cagamas’ purchases and new business plan. As at end-June 2022, TCR and CET-1 ratio stood higher at 42.91% and 41.62%, respectively.

A full review of Cagamas’ ratings (see table) is ongoing and is expected to be completed by next month.



Cagamas Berhad:

  • Corporate Credit Ratings



  • RM60 billion Islamic and Conventional MTN Programme (2007/2067)
  • Proposed RM20 billion Islamic and Conventional CP Programme (2022/2029)






Cagamas Global P.L.C.:
USD2.5 billion Multicurrency MTN Programme


Cagamas Global Sukuk Berhad:
USD2.5 billion Multicurrency Sukuk Issuance Programme



Analytical contacts
Kaylee Chiah
(603) 3385 2515

Lim Chern Yit
(603) 3385 2528


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
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