[RAM] RAM Ratings affirms ratings of Zamarad's Tranche 1, 4, 6 and 7 Sukuk; outlook on Tranche 6 Class B Sukuk raised to positive

RAM Ratings has affirmed the ratings of all rated classes under Zamarad Assets Berhad’s Tranche 1, 4, 6 and 7 Sukuk Murabahah. Concurrently, the outlook for the Tranche 6 Class B Sukuk’s rating has been revised to positive from stable (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).

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. The positive outlook on the Tranche 6 Class B Sukuk is based on our view that the credit enhancement will support a higher rating over the next 12-15 months. 

Notably, Zamarad’s Tranche 1 Sukuk is already fully cash backed. Therefore, repayment obligations under Tranche 1 are no longer dependent on the future performance of the securitised receivables portfolio. Meanwhile, Zamarad’s Tranche 4 Sukuk is on track to becoming fully cash backed by 4Q 2025. For 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 at least preserve the required credit support for the assigned ratings. 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 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 civil service attrition rate, delinquency and default rates are anticipated to remain at current levels. Prepayment rates, on the other hand, will stay elevated across all tranches particularly those backed by more seasoned PF, albeit still within our expectations due to salary revisions and refinancing activities necessitated by the rising cost of living from inflationary pressures. 


Analytical contacts
Sean Lim, CFA 
(603) 2708 8253
sean@ram.com.my

Lim Chern Yit
(603) 2708 8302
chernyit@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my