RAM Ratings has assigned an AA2/Stable rating to the RM350.0 mil Second Tranche Senior Class Medium-Term Notes (Senior MTN) to be issued by Poseidon ABS Berhad (Poseidon or Issuer) under its RM3.5 bil perpetual asset-backed MTN programme. The Issuer is a trust-owned special-purpose vehicle (SPV) of SeaMoney Capital Malaysia Sdn Bhd (SCM), a leading digital finance services provider in Southeast Asia. The SPV facilitates the securitisation of Buy Now Pay Later (BNPL) receivables originated by SCM predominantly through Shopee e-commerce platform under its SPayLater service. 

Proceeds of the Senior MTN, together with RM186.0 mil of unrated Junior MTN (collectively, the Second Tranche MTN), will fund the purchase of RM514.3 mil of eligible receivables from SCM for a purchase consideration of RM507.5 mil. Upfront programme expenses and required liquidity reserves will be prefunded by proceeds of the Junior MTN, which will be subscribed by an entity within SCM's Group. The Junior MTN are subordinated to the Senior MTN in terms of payment priority and claims. 

Aside from tranche-specific terms such as rapid amortisation events and minimum required overcollateralisation (OC), expanded eligibility criteria, a shorter controlled amortisation period, and an additional early redemption option (see below), the Second Tranche MTN is largely similar to the first tranche rated by RAM in August 2023 (see press release here). The additional early redemption option can be exercised if there are insufficient available eligible receivables for purchase during the revolving period. 

The required initial OC rate of 38.4% provides adequate credit support that commensurate with an AA2 rating for the Senior MTN. We evaluated the transaction's cashflow performance under various stress scenarios, including when rapid amortisation is triggered by breaches of minimum collection rates, maximum cumulative default rates or minimum OC rate requirements, among others. At issuance, however, t