Moody's has assigned a provisional A3 rating to Cagamas Global Sukuk Berhad's proposed $2.5bn multi-currency sukuk programme, as sukuk certificate holders are not exposed to the performance risk of sukuk assets.
Cagamas Berhad, the Malaysian firm, will use the proceeds of the sukuk certificates to acquire beneficial interest in a portfolio of assets, the rating agency said.
These assets will form part of the "Wakala" assets and "Murabaha Investment" portfolios, which will be managed by Cagamas Berhad as the agent, on behalf of the sukuk issuer, Cagamas Global Sukuk Berhad, acting as trustee for the certificate holders.
"The sukuk certificate holders are not exposed to the performance risk of the sukuk assets and do not have preferential claim or recourse over the sukuk assets, or rights to cause any sale or
disposition of these assets, except as expressly provided under the transaction documents," Moody's said.
As the agent, Cagamas Berhad will collect income generated from the portfolio against the relevant periodic distribution amounts due for each series, the rating agency noted.
"If there is a shortfall between the amounts collected and the aggregate periodic distribution amounts due, then Cagamas Berhad will, via a liquidity facility, fund such a shortfall to avoid a dissolution event."
"However, a failure to pay such amounts to remedy the shortfall would lead to a payment default under the sukuk certificates."