[RAM] RAM Ratings assigns preliminary ratings to Tranche 6 Sukuk to be issued by RCE Marketing's financing vehicle, Al Dzahab

RAM Ratings has assigned respective preliminary ratings of AAA/Stable and AA₂/Stable to Al Dzahab Assets Berhad’s (Al Dzahab or the Issuer) Tranche 6 RM80.0 mil Class A and RM20.0 mil Class B Sukuk (the Sukuk). This is the sixth issuance under Al Dzahab’s RM900.0 mil Sukuk Murabahah Programme (Programme), sponsored by RCE Marketing Sdn Bhd (RCEM or the Originator).

As part of this issuance, the Issuer has revised the terms of the Programme to include the option to embed a Revolving Option (RO) feature prior to issuance and extend the tenure of the Programme to perpetual. The terms of the RO are similar to that adopted for the Tranches 6 to 10 Sukuk issued by Zamarad Assets Berhad, another sponsored vehicle under RCEM. The RO allows the Issuer to utilise excess cash in the transaction to acquire new receivables, subject to meeting predetermined conditions. Our assessment of the credit enhancement for Tranche 6 assumes that the RO will not be exercised throughout the tenure of the tranche. Under the transaction terms, the Issuer can exercise the RO only if it does not have any adverse impact on the Sukuk’s ratings. 

The Tranche 6 Sukuk will be collateralised by personal financing (PF) facilities extended to civil servants, originated by RCEM through its business partner. The PF will be repaid by way of non-discretionary salary deductions processed by Angkatan Koperasi Kebangsaan Malaysia Berhad, an apex cooperative. The compulsory deductions, coupled with the low attrition rate in the civil service, moderate the credit risks of the PF receivables.

The transaction will be backed by a portfolio of PF receivables with an outstanding principal balance of RM119.42 mil, based on the cut-off date of 28 February 2025, and a prefunded cash reserve of RM2.36 mil in the Finance Service Reserve Account at issuance. The resultant overcollateralisation ratios of 49.27% and 19.42% for the Class A and B Sukuk, respectively, provide sufficient credit support to mitigate cash flow losses from defaults and prepayment rates assumed in AAA and AA₂ stress scenarios.

In assessing the adequacy of credit support, we have maintained our base-case assumptions of a 0.09% monthly net default rate and respective low and high prepayment rates of 0.035% and 0.80%. Stress scenarios applied in our rating analysis are similar to those employed for all tranches issued under Zamarad. 


Analytical contacts
Sean Lim, CFA 
(603) 2708 8253
sean@ram.com.my

Lim Chern Yit
(603) 2708 8302 
chernyit@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my