| Transaction Name |
Details |
Structure
| Yield Terms |
Amount
(Rs. Million)
| Tenure #(Months) |
Credit Opinion
| Credit Support ^ (Rs. Million)
|
| Assignment of Receivables – May 2010 II |
Acquirer’s Payouts (Principal) |
Par
| Fixed |
1001.3
| 48 |
‘AAA(so)’ equivalent |
112.6* |
| Second-Loss Credit Facility |
-
| 93.2 |
48 |
‘BBB(so)’ equivalent |
19.4 |
#The actual tenure will depend on the level of prepayments in the pool, and the exercise of the clean-up call option.
^Additionally, scheduled excess interest spread amounting to approximately Rs.131.3 million (assuming zero prepayments) also provides credit support to the acquirer’s payouts.
*Includes second-loss facility of Rs.93.2 million.
CRISIL has assigned its credit opinion equivalent to a rating of ‘AAA(so)’ to the acquirer’s payouts under Magma Fincorp Ltd’s (Magma Fincorp’s) Assignment of Receivables – May 2010 II transaction. The second-loss credit facility under the transaction has been assigned a credit opinion equivalent to a rating of ‘BBB(so)’. Instruments rated 'AAA(so)' are judged to offer the ‘highest degree’ of safety with regard to timely payment of financial obligations, while instruments rated ‘BBB(so)’ are judged to offer a ‘moderate’ degree of safety.
The transaction has a ‘par’ structure. Magma Fincorp will assign the pool to the acquirer, who will pay a purchase consideration equal to the pool principal balance. The credit opinions are based on the credit quality of the pool cash flows, Magma Fincorp’s origination and servicing capabilities, the transaction’s credit enhancement and payment mechanism, and the soundness of the transaction’s legal structure
The assignment transaction is backed by a pool of car loans originated by Magma Fincorp. The pool also receives support from the excess interest spread (EIS) which is subordinated to the acquirer’s payouts. The pool is geographically diversified, with the top three states accounting for 31.8 per cent of the pool cash flows. The pool has a good seasoning profile (weighted average net seasoning of 10.5 months), and 94.7 per cent of the receivables in the pool are from contracts current on payment as on the pool cut-off date. The pool has a relatively higher proportion of long-tenure contracts: the weighted average original tenure is 49.3 months.
CRISIL has outstanding ratings on 17 securitisation/assignment transactions originated by Magma Fincorp; all the pools have exhibited satisfactory collection performance.
About the Originator
Magma Fincorp (formerly Magma Shrachi Finance Ltd) is a non-banking financial company; it commenced operations in 1989. The company’s merger with Shrachi Infrastructure Finance Ltd in 2006 gave it a nationwide footprint and deep coverage in the semi-urban and rural markets. Magma Fincorp disbursed loans of Rs.45.59 billion in 2009-10 (refers to financial year, April 1 to March 31), against Rs.35.90 billion in 2008-09. The company reported a profit after tax of Rs.396 million for 2008-09, against Rs.504 million for 2007-08.
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Analytical Contacts
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CRISIL Rating Desk
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Disclaimer: A CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell, or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product. CRISIL Ratings’ rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, , or at (+91 22) 3342 3000.
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