August 17, 2010
Mumbai
CRISIL upgrades ratings on PTCs issued by IFMR Capital Pioneer III

Instrument Details Yield Terms Original Principal (Rs. Million) Original Tenure# (Months) Original Credit Support (Rs. Million) Rating^
Series A1 PTCs Fixed 211.8 13 90.9* AAA(so) [Upgraded from ‘AA(so)’]
Series A2 PTCs Residual 52.9 13 38.0$ A(so) [Upgraded from ‘BBB(so)’]
Cash Collateral - 32.8 13 - Unrated
#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 the extent of shortfalls.
^The Series A1 PTCs are entitled to receive interest on a fortnightly basis. There is an expected schedule for principal repayments for the Series A1 PTCs; however, the structure allows for principal payments to be made by the maturity date of the PTCs (ultimate payment structure).
*Credit support for Series A1 PTCs includes Rs.58.1 million in the form of subordination of Series A2 PTCs and residual cash flows of Rs. 5.2 million, which will be paid once the Series A1 PTCs are redeemed.
$Credit support for Series A2 PTCs includes Rs.5.2 million in the form of subordination of residual cash flows, which will be paid only after the scheduled rated payouts promised to the PTC holders are paid in full.

CRISIL has upgraded its ratings on the Series A1 pass-through certificates (PTCs) issued by IFMR Capital Pioneer – III to ‘AAA(so)’ from ‘AA(so)’, and on the Series A2 PTCs to ‘A(so)’ from ‘BBB(so)’. The PTCs are backed by microfinance loan receivables originated by Grameen Financial Services Pvt Ltd (GFSPL; rated ‘P4+’ by CRISIL).

The rating upgrades reflect the increased coverage that the available credit enhancement provides to the PTCs as a result of the strong collection performance and amortisation of the pool. Continued strong collection performance of the underlying pool could lead to a further upgrade in the rating for the Series A2 PTCs.

Pool performance summary (as per July 2010 payout report)
Parameters IFMR Capital Pioneer II
Asset class Microfinance loan receivables
Months after securitisation 4
Amortisation 46.3 per cent
Cash collateral stipulated at the time of securitisation (percentage of initial pool cash flows) 11.9 per cent
Cash collateral utilisation 0.0 per cent
Cumulative collection ratio 99.8 per cent
Average monthly collection ratio over last three months 99.7 per cent
0+ Overdues# 0.1 per cent

# 0+ overdues = (Overdues of contracts overdue for more than 1 day) ÷ Initial pool principal

About the Originator
Incorporated in 1991, GFSPL (formerly, Sanni Collection Pvt Ltd) is a non-deposit-taking NBFC registered with the Reserve Bank of India. In October 2007, GFSPL acquired the entire microfinance portfolio of Grameen Koota (GK). GFSPL organises joint lending groups, and provides top-up loans to clients. Following the takeover of GK’s business, GFSPL’s number of branches increased to 144, borrower strength to 0.37 million, and its presence has spread to 37 districts (as of March 2010). Since May 2008, GFSPL has also been offering individual loans on a pilot basis at five of its urban branches.

For 2008-09 (refers to financial year, April 1 to March 31), GFSPL reported a profit after tax (PAT) of Rs.4.8 million on a total income of Rs.340.5 million, against a PAT of Rs.4.5 million on a total income of Rs.103.9 million for the six months of operations in the previous year

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August 17, 2010

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