RAM Ratings affirms AA2/Stable rating of Poseidons First Tranche Senior MTN

RAM Ratings has affirmed the AA2/Stable rating of Poseidon ABS Berhads (Poseidon or Issuer) First Tranche Senior Medium-Term Notes (MTN) (see table). Poseidon is a trust-owned special-purpose vehicle incorporated to facilitate the securitisation of Buy Now Pay Later receivables, marketed under the SPayLater name, and originated through Shopee e-commerce platform by SeaMoney Capital Malaysia Sdn Bhd (SCM or the Originator).

First Tranche MTN   Issue Size* (RM mil)  OC Ratio^ (%)  Rating/Outlook  Rating Action
Senior MTN            318.0                 48.88          AA2/Stable      Affirmed
Junior MTN            171.0                   -            Not rated          -

* The Issuer exercised the option to re-open the First Tranche MTN in December 2023, increasing the issue size from RM218.0 mil to RM318.0 mil for the Senior MTN, and from RM102.0 mil to RM171.0 mil for the Junior MTN (for details, click here).
^ OC = Overcollateralisation, based on portfolio as at 14 September 2024.

The rating affirmation reflects credit support afforded by the receivables portfolio securing the First Tranche MTN, as reflected in the OC ratio. During the review period, the securitised portfolio performed within the predetermined trigger levels. All relevant transaction covenants were comfortably met.

As at 14 September 2024, the cumulative default rate since issuance stood at 1.15%, significantly below the 20% trigger level. The two-month moving average collection rate of 111.72% and OC ratio of 48.88% were well above the respective trigger levels of 90% and 15%. Since issuance, the Issuer has purchased RM1.33 bil of additional receivables (by outstanding principal) while maintaining OC above the minimum required level. The transaction allows for the purchase of new receivables during the revolving period (up to 3 August 2025), provided that the minimum OC requirement of 37.61% is met. Wec