[RAM] RAM Ratings assigns AA2 rating to Poseidon's Fourth Tranche Senior MTN

RAM Ratings has assigned an AA₂/Stable rating to the RM350.0 mil Fourth Tranche Senior Medium-Term Notes (Senior MTN) to be issued by Poseidon ABS Berhad (Poseidon) under its RM3.5 bil asset-backed MTN programme (the Programme). 

A trust-owned special-purpose vehicle, Poseidon facilitates the securitisation of receivables originated by Monee Capital Malaysia Sdn Bhd (MCM) (formerly known as SeaMoney Capital Malaysia Sdn Bhd). The Fourth Tranche MTN will be backed by a portfolio of Buy Now Pay Later (BNPL) receivables that are marketed under the SPayLater name. The BNPL receivables are originated by MCM primarily through the Shopee platform. Two other MTN tranches are currently outstanding.

Proceeds from the Senior MTN, together with RM155 mil of unrated Junior MTN (collectively, the Fourth Tranche MTN), will fund the purchase of RM493.1 mil of eligible receivables from MCM for a total purchase consideration of RM484.4 mil. Upfront programme expenses and liquidity reserves will be prefunded from proceeds from the Junior MTN, which are subordinated in payment priority. The Junior MTN will be subscribed by an entity within Sea Limited, MCM’s ultimate holding company. 

The structure of Fourth Tranche MTN mirrors earlier tranches, with no material changes to MCM’s business strategy, credit underwriting or collection policies. The loss performance of MCM’s BNPL receivables continued to improve through 2024 to July 2025. This, coupled with reduced concerns over the inflationary effects of subsidy rationalisation, formed the basis for a lower base-case default assumptions than those applied in the initial ratings of previous tranches. Nonetheless, we remain cautious of ongoing macro headwinds, including the soon to be enacted Consumer Credit Act and inflationary pressures on spending power. 

Based on cashflow simulations, the minimum required overcollateralisation (OC) of 38.4% provides adequate credit support to withstand cash flow stresses consistent with an AA₂ rating. The transaction permits discretionary Junior MTN coupon payments, provided the required build-up conditions and floor OC post payment of such Junior MTN coupons are met. Unlike earlier MTN tranches, where floor OC post payment of Junior MTN coupons were set at 45%, the Fourth Tranche’s 38.4% allows more efficient release of excess credit support. Consequently, buffers for unexpected underperformance may be more limited under the Fourth Tranche, though MCM may inject additional funds into the transaction through subscription of Junior MTN or RPS, if required. During rapid or controlled amortisation, Junior MTN coupon payments will be suspended until all Senior MTN are fully redeemed.

RAM will monitor the transaction through monthly performance reports from the Servicer and Security Trustee and keep the rating under surveillance for as long as rated notes remain outstanding.


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L Nurisya Abdullah
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Lim Chern Yit
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chernyit@ram.com.my

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