RAM Ratings affirms ratings of Al Dzahab’s Tranche 4 and 5 Sukuk and Zamarad’s Tranche 1, 4, 6 and 7 Sukuk

Published on 14 May 2024.

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RAM Ratings has affirmed the ratings of all rated classes under Al Dzahab Assets Berhad’s Tranche 4 and 5 Sukuk Murabahah and Zamarad Assets Berhad’s Tranche 1, 4, 6 and 7 Sukuk Murabahah (see table).



Al Dzahab and Zamarad 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).

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. Notably, as Al Dzahab’s Tranches 4 and 5 are fully cash backed, the repayment of obligations under the sukuk is no longer dependent on the future performance of the securitised receivables portfolio. Al Dhazab, therefore, is expected to fully redeem all outstanding sukuk of the two tranches on the expected maturity dates of 11 September 2024 and 14 March 2025, respectively. 

Meanwhile, Zamarad’s Tranche 1 Sukuk is on track to becoming fully cash backed for the outstanding RM95.0 mil rated sukuk by 2Q 2024 (up to Class B’s expected maturity date). For Zamarad’s Tranches 6 and 7, which include 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 Classes A and B. In line with the transaction terms, the RO may be exercised only if it does not adversely impact the existing ratings.

During the review period, the delinquency and default rate performances of the securitised portfolios were largely within expectations despite some spikes in certain months. The fluctuations mainly resulted from collection timing or administrative delays during holidays or festive seasons. Given the non-discretionary salary deductions by which the PF is repaid and the low attrition rate of civil servants, delinquency and default rates are anticipated to remain at current levels. However, the prepayment rates of the Zamarad tranches under review may stay elevated, albeit still within our expectations, due to refinancing necessitated by the rising cost of living from inflationary pressures as well as salary revisions, particularly for more seasoned PF. 

The proposed enactment of the Consumer Credit Act could see tighter regulations on PF going forward. Although RCEM does not fall under Bank Negara Malaysia’s purview, its underwriting standards are guided by the central bank’s lending guidelines. We note nonetheless that existing issues that are backed by static pools of receivables will not be affected by changes in legislation or regulations on future receivables.


Analytical contacts
Sean Lim, CFA 
(603) 3385 2550

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 2024 by RAM Rating Services Berhad

Rating Rationale: Al Dzahab Tranche 4

Rating Rationale: Al Dzahab Tranche 5

Rating Rationale: Zamarad Tranche 1

Rating Rationale: Zamarad Tranche 4

Rating Rationale: Zamarad Tranche 6

Rating Rationale: Zamarad Tranche 7

Ratings on Al Dzahab Assets Berhad