Monday, Jul 18, 2005
MARC has assigned a rating of AAAID to Cagamas MBS Berhad’s (Cagamas MBS) asset-backed Sukuk Musyarakah Issuance (Sukuk Musyarakah) of up to RM[2,050.0] million. The rating is based on the stringent core and portfolio eligibility criteria, aimed at partially mitigating risk of delinquencies and defaults, further reinforced by representations and warranties provided by the Federal Government of Malaysia (GOM); deductions of mortgage payments at source; adequate MRTA coverage on all Government Staff Islamic Home Financings (GSIHFs) in securitised portfolio; overcollateralisation of approximately 138.5% and the ability of the projected cashflow to withstand AAA default and prepayment stresses.
The Sukuk Musyarakah represents the second securities issuance by Cagamas MBS Berhad, a limited purpose entity and a wholly-owned subsidiary of Cagamas Berhad (Cagamas) established with principal activities restricted to acquiring government staff housing loans from the GOM, and issuing asset-backed securities or any other forms of securities for the purpose of acquiring the housing loans/home financing thereof. The portfolio GSIHFs (Portfolio 2005-1) amounting to RM2,844.5 million comprises of mortgages of mainly public sector employees as well as pensioners. The GOM’s Housing Loans Division is the servicer of the securitised pool of GSIHFs.
Credit enhancement is provided by the overcollateralisation of approximately 138.5%. The sizing of the proposed Sukuk Musyarakah was based upon analysis of default, delinquency and prepayment stratification of static pools comprising house financing originated from 1996 to 2000 as well as historical recovery information.
The transaction is a conditional reverse-pay structure with a limited pass-through feature which allows surplus cashflow to be paid to the outstanding Sukuk Musyarakah with the longest maturity should the cash balance exceeds RM66 million after the respective scheduled principal repayments under tranches one, two, three, four and five are met.
The Sukuk Musyarakah represents the second securities issuance by Cagamas MBS Berhad, a limited purpose entity and a wholly-owned subsidiary of Cagamas Berhad (Cagamas) established with principal activities restricted to acquiring government staff housing loans from the GOM, and issuing asset-backed securities or any other forms of securities for the purpose of acquiring the housing loans/home financing thereof. The portfolio GSIHFs (Portfolio 2005-1) amounting to RM2,844.5 million comprises of mortgages of mainly public sector employees as well as pensioners. The GOM’s Housing Loans Division is the servicer of the securitised pool of GSIHFs.
Credit enhancement is provided by the overcollateralisation of approximately 138.5%. The sizing of the proposed Sukuk Musyarakah was based upon analysis of default, delinquency and prepayment stratification of static pools comprising house financing originated from 1996 to 2000 as well as historical recovery information.
The transaction is a conditional reverse-pay structure with a limited pass-through feature which allows surplus cashflow to be paid to the outstanding Sukuk Musyarakah with the longest maturity should the cash balance exceeds RM66 million after the respective scheduled principal repayments under tranches one, two, three, four and five are met.