RAM: MBSB Bank’s Tranche 1 Structured Covered Sukuk Ratings Upgraded; Tranches 2 to 4 Reaffirmed

RAM Rating Services (RAM) has upgraded the rating of Tranche 1 (MYR 215 million) issued under MBSB Bank (MBSB)’s Structured Covered Sukuk Murabahah to AAA from AA1. At the same time, the ratings of Tranches 2, 3, and 4 have been reaffirmed at AA1. All ratings have a Stable Outlook.

MBSB’s Structured Covered Sukuk is a dual recourse instrument, with direct recourse to MBSB as a senior unsecured debt obligation upon default, as well as to the relevant Tranche Cover Assets which comprise personal financing facilities for civil servants via MBSB.

According to RAM, the upgrade of Tranche 1 is driven by its fully cash-collateralised position under its second recourse. Given th...