CAGAMAS MBS BERHAD (CMBS 2007-2) - 2022 |
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| Report ID | 605389003797 | Popularity | 643 views 26 downloads | |||||
| Report Date | Mar 2022 | Product | ||||||
| Company / Issuer | Cagamas MBS Bhd | Sector | Residential Mortgages | |||||
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| Rationale |
Rating action MARC Ratings has affirmed its rating of AAA on Cagamas MBS Berhad’s (Cagamas MBS) RM2,410.0 million asset-backed fixed rate serial bonds (CMBS 2007-2) with a stable outlook. Rationale The rating incorporates CMBS 2007-2’s very high accumulated cash and permitted investments of RM759.6 million as at the reporting date of February 22, 2022, which is more than sufficient to cover the outstanding issuance amounts of RM355.0 million as well as its remaining coupon obligations of about RM41.9 million under tranche 6 and tranche 7. The tranches’ maturity dates are August 22, 2022, and August 20, 2027, respectively. Cagamas MBS was established to undertake the securitisation of conventional and Islamic home financing originated by the Malaysian government. CMBS 2007-2 is backed by a pool of government staff housing loans (GSHL), or Portfolio 2007-2. Direct monthly salary/pension deductions form the source of repayment for CMBS 2007-2. The collateral pool performance of CMBS 2007-2 has remained strong as reflected by the high credit enhancement level of 329.5% as at the reporting date of February 22, 2022, supported by the portfolio’s historically low cumulative default rate (CDR) of 0.18% of the initial pool balance. The CDR is well below MARC Ratings’ revised projection of 1.57%. GSHL defaults, classified as accounts in arrears for more than nine months, were mainly due to pending assessment on the status of borrower accounts and pending claims on Mortgage Reducing Term Assurance (MRTA). The pool’s transaction terms allow for prepayments of the last two tranches upon meeting certain conditions; this option has not been exercised as the conditions have not been met. In particular, cash flow arising from excess prepayments remained short of the projected amounts while the outstanding principal of about 14.6% of the initial principal during the current review period is higher than the threshold of 10% that is required to allow for prepayment. Rating outlook/trajectory The stable outlook reflects the fully cash-collateralised position of CMBS 2007-2, among other key factors; the outlook is not expected to change over the redemption period. Key strengths
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