CRISIL has assigned its ‘P1+(so)’ rating to Series A1, A2, and A3 pass-through certificates (PTCs) issued by Indian Corporate Loan Securitisation Trust (ICLST) 2008 – Series 30. The PTCs are backed by loan receivables from Bharat Petroleum Corporation Ltd (BPCL, rated ‘AAA/FAAA/Negative/P1+’ by CRISIL). The receivables arise from a loan of Rs.3750 million originally disbursed to BPCL by YES Bank Ltd (YBL). The ‘P1+(so)’ rating indicates that the degree of safety regarding timely payment on the PTCs is ‘very strong’. The ‘P1+(so)’ rating is valid for instruments with tenure of one year or less.

The ratings are based on the credit quality of the underlying loan receivables from BPCL, the payment mechanism and transaction structure that are designed to ensure timely payment of obligations on the PTCs, and the soundness of the transaction’s legal structure.

The terms of the loan include a fixed rate of interest payable monthly, and repayment of principal amount of Rs.3500 million at the end of 43 days and the remaining Rs.250 million at the end of 91 days. YBL has assigned the loan to ICLST 2008 – Series 30, which, in turn, has issued the three series of PTCs: Series A1, A2, and A3 PTCs with tenure of 43 days, 91 days, and 91 days, respectively. Series A1 PTC is a principal-cum-interest strip; the holders are entitled to receive monthly interest payments due on the principal amount of Rs.3500 million and the principal of Rs.3500 million at the end of 43 days. Series A2 PTC is a principal-only strip; the holders are entitled to receive the principal payment of Rs.250 million at the end of 91 days. Series A3 PTC is an interest-only strip; the holders are entitled to receive the monthly interest payments due on the principal amount of Rs.250 million. The transaction is based on a ‘premium’ structure, where the trust pays an amount equal to the discounted value of the loan receivables to the seller. IL&FS Trust Company Ltd is the trustee to the transaction. Legal final maturity of all the three series of PTCs is 30 working days post scheduled maturity.

About BPCL
BPCL, a Government of India (GoI) undertaking, has a combined refining capacity of 22.5 million tonnes per annum (mtpa). It has two refineries on the west coast – in Mumbai with a capacity of 12 mtpa, and in Kochi with 7.5 mtpa. BPCL also owns 61.65 per cent of the 3-mtpa Numaligarh Refinery Ltd and is setting up the 6-mtpa Bina Refinery, which is slated to commence commercial production by 2009-10 (refers to financial year, April 1 to March 31). BPCL is the second largest oil marketing company in India, with an overall share of 20 per cent of the petroleum products sold in India. The company has around 8000 retail outlets in the country. In 2007-08, BPCL reported a consolidated net profit of Rs.19.12 billion (Rs.23.55 billion in 2006-07) on net sales of Rs.1112.43 billion (Rs.984.19 billion). For the three months ended June 30, 2008, the company reported a net loss of Rs.9.94 billion on net sales of Rs.392.87 billion, as against a net profit of Rs.2.56 billion and net sales of Rs.240.87 billion for the corresponding period of the previous year.

^{^}The common independent director on CRISIL’s and Bharat Petroleum Corporation Ltd’s (BPCL’s) boards did not participate in the rating process for these instruments.