MARC has affirmed the long term rating of Cagamas MBS Berhad’s (Cagamas MBS) asset-backed Fixed Rate Serial Bonds of RM2,060.0 million at AAA. The affirmation reflects the satisfactory performance of the securitized mortgage portfolio; overcollateralisation of 141.0%; and adequate monitoring procedures employed in respect of the securitized portfolio by the transaction administrator, Cagamas Berhad (Cagamas).


Cagamas MBS is a limited purpose entity and a wholly-owned subsidiary of Cagamas Berhad (Cagamas), whose principal activities are restricted to acquiring government staff housing loans, originated under both Islamic and conventional principles, from the Federal Government of Malaysia (GOM), and issuing securities for the purpose of acquiring the housing loans/home financing thereof.

Cagamas MBS had, on 31 March 2005 (representing retrospective purchase of 9 months), acquired from the GOM rights, titles, interests and benefits in respect of selected government staff housing loans (GSHLs) amounting to RM2,898.7 million including all charges, guarantees and insurances by way of an equitable assignment. The acquisition was funded by the issuance of RM2,060.0 million nominal value of fixed rate serial bonds (CMBS 2005-2) which represents the third issuance by Cagamas MBS. As with the previous two transactions, the GOM’s Housing Loans Division or Bahagian Pinjaman Perumahan (BPP) is the servicer under this transaction. CMBS 2005-2 comprises of seven tranches with maturities on the third, fifth, seventh, tenth, twelfth, fifteenth and twentieth anniversary from the issuance date.

The pool servicing as collateral for the bonds consists of 36,932 fixed rate mortgage loans with a total outstanding balance of RM2,843.9 million at the end of the six month period since closing. All mortgages are originated by the GOM’s Housing Loans Division, and monthly mortgage payments are typically deducted at source from the monthly salaries and pensions of borrowers.


For the first 6 months since closing, Portfolio 2005-2 registered a cumulative prepayment rate of 0.22% translating to a quarterly prepayment rate of 0.11%. A total prepayment amount of RM6.3 million was collected for the first two quarters which was attributed entirely to voluntary prepayments. During the period under review, delinquency under Portfolio 2005-2 remained low at 0.01%.


As at September 2005, CMBS 2005-2 benefits from overcollateralisation of 141.0%, on the basis of total outstanding principal of RM2,843.9 million and RM61.54 million of cash (including permitted investments) vis-à-vis the total issue size of RM2,060.0 million. The cash balance of RM61.54 million as at 12 June 2006 represents 27.35% of Tranche 1 CMBS 2005-2 due in December 2008.