MUMBAI, India, Oct. 27, 2009 (PR Newswire Europe) --
Following the first rated securitisation of micro-loans
in India, the pass-through certificates (PTCs or securities) from the
transaction have received a rating upgrade from CRISIL. The ratings of the
senior and junior tranches of PTCs have been upgraded to AAA (so) and A (so),
from their original ratings of AA (so) and BBB (so) respectively.
The transaction, which was concluded by IFMR Capital in
March 2009, involved securitisation of micro-loan portfolio of Rs 157 million
(principal outstanding) originated by Equitas Micro Finance India Pvt Ltd.
The upgrade is based on the performance of the pool, the timeliness of
payments to the SPV and the extent of credit enhancement in relation to the
outstanding cash flows on the pool.
Capital Structure of Securitisation
PTC Yield Principal Principal Principal Legal Expected Upgraded
Terms (Rs mn) % (At Outstanding Final Maturity Rating
issue) (Rs mn) Maturity Date
Date
Series
A1 Fixed 125.4 80% 59.0 22 Oct 07 May AAA (so)
2010 2010
Series
A2 Residual 31.3 20% 31.3 22 Oct 22 Oct A (so)
2010 2010
Cash
Collateral 18.3 11.7% 18.3 Unrated
of Issue
Size of
PTCs
As on 22 October 2009. Source: Report from IDBI Trusteeship Services
Pvt Ltd (Trustee for SPV)
IFMR Capital, the sole structurer and arranger, has
provided second loss credit enhancement in the form of an investment in 100%
of the Series A2 securities and the Series A1 securities have been fully
underwritten by a bank investor.
For credit enhancement, Equitas had provided a first
loss facility in the form of cash collateral equal to 11.7% of the original
principal amount of the portfolio. This cash collateral together with the
excess interest spread (EIS) being trapped in the SPV are used to cover any
shortfall in repayments on both tranches of securities.
