RAM Ratings has reaffirmed the AAA/stable rating of the MTN issued by AmMortgage One Berhad, involving the securitisation of staff housing loans originated by Telekom Malaysia Berhad (TM).

Published on 18 September 2014

RAM Ratings has reaffirmed the AAA/stable rating of the MTN issued by AmMortgage One Berhad, involving the securitisation of staff housing loans originated by Telekom Malaysia Berhad (TM).
The reaffirmation is premised on the available credit enhancement provided by the 23.92% overcollateralisation (OC) level, supported by RM145.23 million of outstanding principal receivables and RM2.61 million of cash and permitted investments as at 31 May 2014. The better OC performance was due to the lower-than-assumed cumulative net default rate, which had resulted in faster-than-assumed deleveraging of the First Notes Series. Although the underlying mortgage loan portfolio’s cumulative net default rate has increased to 0.90%, it is still below our base-case assumption of 1.74%.
The credit enhancement also reflects TM’s undertaking to support the First Notes Series through various compensation payments and programme fees (TM’s debt issues carry AAA/Stable/P1 ratings from RAM). As at 31 May 2014, TM had paid AmMortgage RM28.30 million of monthly programme fees in total. In this regard, the rating of the First Note Series is strongly linked to TM’s credit profile.
We believe that TM’s healthy 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, i.e. AmBank (M) Berhad, 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