MARC Ratings has assigned preliminary ratings of MARC-1/MARC-1IS to Cagamas Berhad’s proposed Conventional and Islamic Commercial Papers (CCP/ICP) programmes with a combined aggregate limit of RM20 billion. The ratings outlook is stable.
Cagamas’ status as the national mortgage corporation and its strategic role in the domestic financial system, underpinned by its strong capitalisation and healthy liquidity position, remain key rating drivers. As at end-June 2022, Cagamas purchased about RM5.0 billion worth of loans and financing through its purchase-with-recourse (PWR) scheme, which was in line with purchases made in the corresponding period last year (end-June 2021: RM5.0 billion). As per previous years, no purchases were made through its purchase-without-recourse (PWOR) scheme.
Cagamas’ capitalisation remained sound, underpinned by its exposure to highly rated counterparties as well as minimal impairment losses. As at end-2021, its total capital ratio stood at 42.4%, providing ample headroom to fund future business activities. Its funding and liquidity positions have also remained healthy with a funding base of RM35.4 billion as at end-2021. Profitability was lower with pre-tax profit of RM281.4 million (2020: RM301.4 million) on the back of maturing PWR assets and rundown of its PWOR portfolio.