A. U. Financiers (India) Limited

May 03, 2013
Mumbai

CRISIL assigns ‘CRISIL A (SO)’ to PTCs issued by India Standard Loan Trust - V backed by receivables originated by Au Financiers (India) Ltd

Transaction Name Details Structure Yield Terms Amount (Rs. Million) Tenure (Months) ^# Rating / Credit Opinion Credit-cum-Liquidity Support (Rs. Million)^{^}
India Standard Loan Trust – V Series A PTCs Par Fixed 926.8 54 CRISIL A (SO) 80.7
Series B PTCs Fixed 49.8 54 CRISIL A (SO) 80.7
Second- Loss Facility - 32.8 54 CRISIL BBB (SO) Equivalent 47.9
First Loss Facility - 47.9 54 Unrated -

^#Indicates door-to-door tenure, which is the difference between pay-in date and last payout date. Actual tenure will depend on the level of prepayments in the pool, and exercise of the clean-up call option
^{^}Additionally, scheduled excess interest spread amounting to Rs.111.0 million (assuming zero prepayments) also provides credit support to the PTC payouts

CRISIL has assigned its ‘CRISIL A (SO)’ rating to the pass-through-certificates (PTCs) issued by India Standard Loan Trust – V. CRISIL has also assigned its ‘CRISIL BBB (SO)’ Equivalent credit opinion to the second-loss facility of the pool. The PTCs are backed by receivables against small and medium enterprise, commercial vehicle, and auto loans originated by Au Financiers (India) Ltd (Au Financiers).

The ratings are based on the credit quality of the pool cash flows, Au Financiers’ origination and servicing capabilities, the credit-cum-liquidity enhancement and payment mechanism, and the legal structure of the transaction. The PTC payouts receive support from the excess interest spread, which is subordinated to the PTC payouts and the credit-cum-liquidity enhancement.

The transaction is structured at ‘par’, wherein Au Financiers has assigned the pool to the trust for a consideration equal to the pool principal at the time of securitisation.

About the Pool
The pool has a moderate geographic concentration, with the top state, Rajasthan, contributing 53.4 per cent. The pool has a moderate seasoning profile; after a weighted average net seasoning of 6.9 months (weights being principal outstanding on the contracts), all the contracts in the pool are current on payments. The pool has a moderate proportion of long-tenure contracts: the weighted average original tenure is 44.3 months.

Rated Pools
CRISIL has outstanding ratings/credit opinions on 22 transactions backed by retail loan receivables originated by Au Financiers. The performance of the rated pools has been in line with CRISIL’s expectations.

About the Originator
Incorporated in 1996 and promoted by Mr. Sanjay Agarwal, Au Financiers operates in the asset-financing business, primarily in commercial vehicle financing. The company has a wide reach in Rajasthan, and has expanded its reach in Maharashtra and Gujarat. It has also started operating in Goa, Punjab, Chhattisgarh, and Madhya Pradesh from the last quarter of 2010-11 (refers to financial year, April 1 to March 31). The company had assets under management of Rs.25.5 billion as on March 31, 2012. In February 2008, Au Financiers signed a strategic investment agreement with India Business Excellence Fund, whereby the fund infused capital of Rs.200 million into Au Financiers in the form of compulsorily convertible preference shares. In March 2010, International Finance Corporation (IFC), Washington, India Business Excellence Fund, and India Business Excellence Fund I, have together infused Rs.550 million into Au Financiers. Furthermore, in March 2012, Warburg Pincus and IFC together infused Rs.1.83 billion in Au Financiers.

Adjusting for managed assets, Au Financiers reported a profit after tax (PAT) of Rs.631 million on a total income of Rs.2.7 billion for 2011-12, against a PAT of Rs.201 million on a total income of Rs.1.2 billion for 2010-11.

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May 03, 2013	http://www.crisil.com