RAM Ratings affirms Zamarad’s Tranche 2, 3, 5 and 8 Sukuk ratings

Published on 22 Sep 2023.

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RAM Ratings has affirmed the ratings of Zamarad Assets Berhad’s Tranche 2, 3, 5 and 8 Sukuk Murabahah (see table). Zamarad is a special-purpose vehicle 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).

OC = overcollateralisation (with cash)
^ As at 30 June 2023


The rating affirmations reflect the underlying receivables’ favourable default and prepayment performances relative to our assumptions, which provide adequate credit support commensurate with the respective issue ratings of all tranches under review. These trends are expected to continue going forward in view of non-discretionary salary deductions through which the PF is repaid and low attrition rates in the civil service.

Specific to Zamarad’s Tranche 8, which includes a Revolving Option (RO), we expect the utilisation of excess cash reserves for the purchase of new receivables, if any, to preserve the required credit support for the respective AAA and AA2 ratings of the Class A and Class B Sukuk. Under the transaction terms, any exercise of the RO should not have any adverse impact on the existing ratings.

During the review period, all the securitised portfolios backing the respective tranches saw no major deterioration in overall asset quality despite some spikes in monthly default rates. These fluctuations were mainly due to collection timing or administrative delays during the holidays or festive seasons which were remedied in the subsequent month. Except for Tranche 8 Sukuk where prepayment hovered closer to our low prepayment assumption, prepayments for the remaining tranches under review trended higher y-o-y although still within our expectations. The elevated prepayment levels resulted from refinancing activities owing to the rising cost of living amid inflationary pressures. For Tranche 8 Sukuk, we expect prepayment rates to gradually rise over time as the PF contracts become more seasoned. 

The proposed enactment of the Consumer Credit Act may lead to stricter PF regulations in the future. While RCEM operates outside Bank Negara Malaysia’s purview, its underwriting standards are guided by the central bank’s lending guidelines. We note, however, that existing issues backed by static pools of receivables will not be impacted by legislative or regulatory changes in respect of future receivables.


Analytical contacts
Zachary Tan
(603) 3385 2612

Lim Chern Yit
(603) 3385 2528

Media Contact
Sakinah Arifin
(603) 3385 2500


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: Zamarad Assets Berhad Tranche 2

Rating Rationale: Zamarad Assets Berhad Tranche 3

Rating Rationale: Zamarad Assets Berhad Tranche 5

Rating Rationale: Zamarad Assets Berhad Tranche 8

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