In a statement here today, MARC said the rating reflected the satisfactory performance of the collateral pool, in particular its low cumulative default rate and slightly lower-than-projected prepayment rate which has resulted in a modest increase in credit enhancement.

"The rating also incorporated adequate monitoring procedures employed in respect of the securitised portfolio by the transaction administrator, Cagamas Bhd," it said.

Cagamas MBS is a limited purpose entity and a wholly-owned subsidiary of Cagamas Holdings Bhd, whose principal activities are restricted to acquiring government staff housing loans, originated under both Islamic and conventional principles, from the federal government and issuing securities for the purpose of acquiring the housing loans/home financings.

MARC said the issuance of CMBS 2007-1-i represented the fourth securities issuance by Cagamas MBS.

The government's Housing Loans Division is the servicer for Portfolio 2007-1-i.

The rating agency said the effect of lower-than-projected prepayment rate recorded for the period under review of 0.38 percent (projected: 0.44 percent) was mitigated by lower-than-expected delinquency and default rates for the same period.

"For the period under review, Portfolio 2007-1-is delinquency rate stood at 7.5 percent, of which 96.0 percent is accounted for by technical delinquencies attributable to administrative delays," it said.

MARC expected Portfolio 2007-1-i to continue to perform within its stressed expectations going forward.