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

Published on 08 Jun 2023.

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RAM Ratings has affirmed the AAA/Stable ratings of Cagamas MBS Berhad’s following 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 facilities are repaid via non-discretionary direct deductions from civil servant salaries and pensions by Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA). This minimises exposure to the borrowers’ credit risks.

Bond / Sukuk Issue

Outstanding Issue Amount
(RM mil)

Overcollateralisation Ratio (%)


Rating Action

CMBS 2005-2


(as at end-June 2022)



CMBS 2007-1-i


(as at end-October 2022)



CMBS 2007-2


(as at end-August 2022)




The rating actions reflect the better than assumed loss performance of the loan and financing portfolios backing the respective issuances. The asset cover – as seen in the overcollateralisation ratios – was ample to absorb default losses thus far. 

During the review period, average monthly prepayment rates were lower than our assumption but were well compensated by satisfactory default performances. The compounding effect of these factors over the years put the CMBS 2005-2 and CMBS 2007-2 transactions in fully cash-backed positions. Accumulated cash reserves in both transactions adequately cover all outstanding principal and remaining coupon or profit obligations up to the maturity of the last maturing tranches in December 2025 (CMBS 2005-2) and August 2027 (CMBS 2007-2). CMBS 2007-1-i is likely to be fully cash-backed by the next reporting period as at end-January 2023.

There have been no major changes to LPPSA’s home credit underwriting and collection procedures since our last review. To further improve the collection performance, a Debt Settlement Plan was introduced in October 2022 to allow eligible borrowers who leave the civil service or retire without pension to reschedule their repayment profiles. Overall, LPPSA demonstrated satisfactory servicing capabilities during the review period. 


Analytical contacts
L Nurisya Abdullah
(603) 3385 2492

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 2023 by RAM Rating Services Berhad

Rating Rationale: Cagamas MBS Berhad 2005-2

Rating Rationale: Cagamas MBS Berhad 2007-1-i

Rating Rationale: Cagamas MBS Berhad 2007-2

Ratings on Cagamas MBS Berhad CMBS 2005-2