#Indicates door-to-door tenure, between placement date and the legal final maturity date; actual tenure will depend on the level of prepayments in the pool and extent of shortfalls.
$Acquirer is entitled to receive interest on a fortnightly basis; there is an expected schedule for principal repayments; however, the structure allows for principal repayments to be made by the maturity date (ultimate payment structure).
*Credit support for acquirer’s payouts includes Rs.141.6 million in the form of subordination of receivables.

CRISIL has assigned its credit opinion equivalent to a rating of ‘P1+(so)’ to the acquirer’s payouts under the assignment transaction of Asmitha Microfin Ltd (AML; rated ‘BBB/Stable’ by CRISIL). The acquirer’s payouts are backed by a pool of receivables from microfinance loans originated by AML. A 'P1+' rating indicates that the degree of safety regarding timely payment on the instrument is ‘very strong’.

The credit opinion is based on the credit quality of the pool cash flows, AML’s origination and servicing capabilities, the credit support available to the acquirer’s payouts, the payment mechanism for the transaction, and the soundness of the transaction’s legal structure.

The transaction has a ‘par with turbo amortisation’ structure, wherein the acquirer will pay a purchase consideration equal to 84.65 per cent of the pool principal at the time of assignment. The acquirer is entitled to receive interest on a fortnightly basis. There is an expected schedule for principal repayments for the acquirer; however, the structure allows for principal repayments to be made by the maturity date (ultimate payment structure). The structure further envisages that excess collections each fortnight, if any, will be used for amortisation of the acquirer’s principal outstanding. Subordinated cash flows¹ will flow back to AML in its capacity as the credit enhancement provider once all the payouts to the acquirer are made in full.

The pool has a weighted average seasoning of 17.5 instalments with 96.6 per cent of the pool comprising loans with weekly repayment cycles. The top five districts account for 25.2 per cent of the pool cash flows. The average ticket size of the pool is Rs.10,512. All the contracts in the pool are current at the time of assignment.

About the Originator
Set up in 2002 as a non-banking financial company, AML is one of the top five microfinance institutions in India in terms of loans outstanding. The company follows the micro-credit model of Grameen Bank, Bangladesh. In 2008-09 (refers to financial year, April 1 to March 31), AML’s loan disbursements more than doubled to Rs.12.5 billion. As on June 30, 2010, AML had loans outstanding of Rs.14.2 billion (including managed loans) and a presence across 14 states in India. In August 2009, BlueOrchard Private Equity Fund infused Rs.500 million into AML, thereby increasing its stake in AML to 18.1 per cent.

For 2008-09, AML reported a profit after tax (PAT) of Rs.230.0 million on a total income of Rs.1.4 billion, against a PAT of Rs.45.0 million on a total income of Rs.650.0 million for 2007-08. For the nine months ended December 31, 2009, AML reported a PAT of Rs.386.0 million on a total income of Rs.2.0 billion, against Rs.149.0 million and Rs.922.0 million, respectively, for the corresponding period of the previous year.

¹Receivables available after meeting all the payout obligations of the acquirer