RAM Ratings has reaffirmed the AAA/stable rating of the Medium-Term Notes (“First Note Series”) issued by AmMortgage One Berhad (“the Issuer”) involving the securitisation of staff housing loans originated by Telekom Malaysia Berhad (“TM” or “the Originator”).

Published on 13 September 2013

RAM Ratings has reaffirmed the AAA/stable rating of the Medium-Term Notes (“First Note Series”) issued by AmMortgage One Berhad (“the Issuer”) involving the securitisation of staff housing loans originated by Telekom Malaysia Berhad (“TM” or “the Originator”).
The rating is premised on the credit enhancement available for the remainder of the First Notes Series, as afforded by the RM176.67 million of outstanding principal receivables and RM5.99 million of permitted investments and cash balances as at 31 May 2013. The credit enhancement, equivalent to 19.79% of the over-collateralisation (“OC”) ratio, provides protection against losses arising from delinquencies, defaults and prepayments consistent with an AAA-stress scenario. The underlying mortgage loan portfolio’s cumulative net default rate remained low at 0.45% as at 31 May 2013, below RAM’s base-case assumption of 1.38%. The loan portfolio’s better-than-assumed default performance and the gradual deleveraging of the First Note Series to RM152.48 million from the issuance amount of RM339.38 million have resulted in the higher OC compared to 14.31% a year earlier.
The credit enhancement also reflects TM’s undertaking to support the First Notes Series through various compensation payments and programme fees; as at 31 May 2013, TM had paid the Issuer total monthly programme fees of RM24.28 million. In this regard, the rating of the First Note Series is strongly linked to the Originator’s credit profile. RAM believes that TM’s sturdy financial position and strategic role as Malaysia’s national telecommunication company underscore its superior credit profile. We have also considered the servicing ability of the Portfolio Servicer, AmBank (M) Berhad (“AmBank”), including its administration of the entire TM Employee Mortgage Scheme for and on behalf of TM. We expect AmBank to be able to adequately perform its servicer responsibilities, as required under the transaction.

Media contact
Tan Han Nee
603 7628 1023
hannee@ram.com.my