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TM sells staffs housing loans to AMMORTGAGE ONE

Posted on: May 31, 2009

Bernama – Thursday, May 28

KUALA LUMPUR, May 27 (Bernama) — Telekom Malaysia Bhd’s (TM) has sold its employees’ residential loans to AmMortgage One Bhd, a subsidiary of AmBank (M) Bhd, with the first series having an outstanding principal value of RM348.9 million.

In a filing to Bursa Malaysia today, it said following the acquisition, AmMortgage One would issue medium-term notes to raise sufficient proceeds to satisfy the purchase consideration.

In tandem with the agreement, it said, a servicing agreement between TM, AmMortage One and AmBank Bank was also signed, which would see the outsourcing of TM’s mortgage servicing operations to AmBank.

“This business collaboration will monetise one of our biggest non-core assets, namely the housing loans of our employees with a current carrying value of around RM400 million,” it said.

It said TM would be able to unlock that value from its balance sheet.

“Another purpose of this collaboration is to leave the business of managing these loans to the expert,” it said, adding that a total of 7,700 employees have taken up housing loans from the company.

It has about 22,000 employees todate.

TM said under the funding programme to cater to the acquisition of the asset portfolio comprising TM staff housing loans, AmMortgage was expected to issue up to RM250 million commercial papers and up to RM1 billion medium-term notes pursuant to the exercise.

“The papers to be issued to acquire the first series of mortgage assets are expected to be assigned a rating of ‘AAA’ by RAM Rating Services Bhd,” it said. — BERNAMA



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