Wednesday June 20, 2012
Cagamas MBS bonds AAA rating affirmed
In a statement yesterday, MARC said the rating action affected the outstanding bonds of about RM1.9mil.
It said the affirmed rating on the bonds reflected a strong credit enhancement level of 133.7% for the outstanding bonds, supported by the transaction’s collections account balance of RM452.2mil and the outstanding principal of non-defaulted mortgages of RM2.08bil.
“The affirmed rating also benefits from satisfactory management of collateral servicing and transaction administration,” MARC said.
The rating agency said its cashflow analysis supported expectations that sufficient funds would be built up for tranche 2 worth RM375mil on Aug 22.
It said Cagamas MBS would be able to exercise the option to partially redeem the previous tranche on the next scheduled redemption date on condition that the RM90mil remained in the collection account post-redemption.
“The cashflow analysis also demonstrates that the bonds are able to withstand AAA default and prepayment scenarios for their remaining tenures,” it said.
Meanwhile, it said, the stable outlook was premised on the collateral pool’s stable performance and its high overcollateralisation ratio, which allowed the bonds to withstand a large increase in mortgage defaults and loss rates. — Bernama