Friday, October 21, 2011

RAM Ratings reaffirms Tresor Assets' AAA rating

KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the AAA rating of Tresor Assets Bhd's RM89 million tranche D senior bonds, with a stable outlook.

It said on Friday, Oct 21 the stable outlook reflected its view that the performance of Tranche D's securitised loan pool (the portfolio) would remain satisfactory throughout the transaction's tenure. However, the RM11 million tranche D subordinated bonds were not rated.

Tresor is a special-purpose vehicle set up to undertake a RM1.5 billion funding programme involving receivables purchased from RCE Marketing Sdn Bhd.

RCE Marketing is a unit of RCE CAPITAL BHD [] which provides personal loans through strategic tie-ups with cooperatives.

Tranche D is the 4th issuance (out of nine issued to date) under this RM1.5 billion programme.

The Tranche D Bonds are secured against a pool of personal loans originated by Koperasi Wawasan Pekerja-Pekerja Bhd (Kowaja), and feature loans with tenures of up to 10 years.

As at end-June 2011, RM60 million of the Tranche D senior bonds remained outstanding, supported by RM35.34 million of outstanding receivables and RM60.79 million of cash and permitted investments that correspond to a collateralisation level of 160.22%.

'The reaffirmation of the rating is premised on the available credit enhancement provided by the overcollateralisation level, available excess spread, structural features of the transaction and performance of the portfolio,' it said.

As at June 30, 2011, the receivables pool recorded a cumulative net default rate of 5.23% (as a percentage of the original principal balance on the purchase date), compared to RAM Ratings' base-case assumption of 6.16%.

The cumulative prepayment rate stood at 53.52%, translating into an average monthly prepayment rate of 1.69% which is in line with our assumptions.'' As at end-June 2011, the portfolio contained 2,757 loans, with a weighted-average seasoning of 33 months; the average loan size worked out to RM12,817 with a weighted-average remaining term-to-maturity of 78 months.

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