Detailed Rationale CRISIL Ratings has assigned its ‘Provisional CRISIL A- (SO)’ to Series A1 pass-through certificates (PTCs) issued by ‘Nimbus 2022 PL Ayra’. The transaction is backed by unsecured personal loan receivables originated by KrazyBee Services Private Limited (KrazyBee, rated ‘CRISIL BBB+/Stable’). The ratings are based on the credit support available to the PTCs, credit quality of the underlying pool receivables, KrazyBee’s origination and servicing capabilities, and soundness of the transaction’s legal structure.
The transaction has a 'Par with EIS' structure. KrazyBee will assign the loan receivables to ‘Nimbus 2022 PL Ayra’, a trust settled by Catalyst Trusteeship Limited (CTL), which will then issue Series A1 PTCs for 90.0% of the pool principal. KrazyBee will continue to service the pool contracts as the servicing agent.
The PTCs are supported by the cash collateral (in the form of fixed deposit), and cashflow subordination. The total credit support available in the transaction is as below:
Series A1 PTCs are entitled to timely interest payments on a monthly basis, while the principal repayment is promised on an ultimate basis by legal final maturity. |
Key Rating Drivers & Detailed Description Strengths: • Credit support available in the structure: External cash collateral in the structure amounting to Rs 3.55 crore (10% of initial pool principal) and internal credit enhancement from scheduled cashflow subordination (assuming zero prepayments) for Series A1 PTCs amounting to Rs 5.22 crore – including Rs 3.55 crore of principal overcollateralisation. • Repayment track record of pool contracts: The pool contracts have shown a good repayment track record, with no instance of delinquency in any contract prior to securitisation. The weighted average seasoning of the pool is 4.7 months (as measured from first EMI date to pool cut-off date) and the disbursed principal has amortised by 33.3% prior to securitisation.
Weakness: • Unsecured nature of loans and risk profile of underlying borrowers: The pool comprises of personal loans extended to salaried and self-employed borrowers. In a stressed environment, such loans are vulnerable to higher delinquencies. Given the unsecured nature of these loans, recovery prospects from delinquent borrowers are limited. The pool’s collection performance will remain susceptible to risks inherent in this asset class. |
Liquidity: Adequate The cash collateral available in the transaction is Rs 3.55 crore (10% of the initial pool principal) is in the form of a fixed deposit. Liquidity is adequate given that the credit enhancement available in the structure is sufficient to cover losses exceeding 1.5 times the currently estimated base shortfalls. |
Rating Sensitivity factors Upward
Downward
These aspects have been factored by CRISIL Ratings in its rating analysis.
Additional disclosures for the provisional rating The provisional rating is contingent upon execution of the following documents:
Additional documents executed for the transaction, if any, should also be provided. The provisional rating shall be converted into a final rating after receipt of transaction documents duly executed within 90 days from the date of issuance of the instrument.
The final rating assigned post conversion shall be consistent with the available documents. In case of non-receipt of the duly executed transaction documents within the above-mentioned timelines, the rating committee of CRISIL Ratings may grant an extension of up to another 90 days.
Rating that would have been assigned in the absence of the pending documentation In the absence of pending documentation considered while assigning provisional rating as mentioned above, CRISIL Ratings would not have assigned any rating.
Risks associated with the provisional rating: A prefix of 'Provisional' to the rating symbol indicates that the rating is contingent upon occurrence of certain steps or execution of certain documents by the issuer, as applicable. In case the documents received and/or completion of steps deviates significantly from the expectations, CRISIL Ratings may take an appropriate action including placing the rating on watch or a rating/outlook change, depending on status of progress on a case to case basis. In the absence of the pending steps / documentation, the rating on the instrument would not have been assigned ab initio.
About the pool The securitisation transaction is backed by a pool of unsecured personal loan receivables. As of the pool cut-off date, the pool comprised of 51.5% self-employed borrowers and 48.5% salaried borrowers, and the weighted average seasoning for pool loans was 4.7 monthly instalments, against a weighted average original tenure of 14.2 monthly instalments. Average ticket size is Rs 1.2 lakh with weighted average interest rate of 21.2%. All the contracts in the pool had a credit bureau score of greater than 750 and were current on repayment as of the pool cut-off date. CRISIL Ratings has adequately factored all these aspects in its rating analysis.
Counterparty details
About the Originator KrazyBee Services (P) Limited is a systemically important, non-deposit taking, non-banking financial company (ND-NBFC). The company commenced operations in fiscal 2017 and is promoted by Mr Madhusudan Ekambaram, Mr Vivek Veda and Mr Karthikeyan Krishnaswamy, who have prior experience in product portfolio management, sales, technology and finance. It is backed by strong PE investors such as New Quest Capital, Premji Invest, Alpine Capital, Motilal Oswal Private Equity, ICICI Bank amongst others. The company focuses on providing unsecured personal loans to young professionals in India.
Past rated pools This is the first securitisation transaction originated by KrazyBee to be rated by CRISIL Ratings. |
Key Financial Indicators (Consolidated)
KrazyBee (Standalone)
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Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
1 crore = 10 million # Indicates door to door tenure. Actual tenure will depend on the level of prepayments in the pool, and exercise of the clean-up call option & Series A1 PTC holders are entitled to receive timely interest payments on a monthly basis, while the principal repayment is promised on an ultimate basis by legal final maturity *Additional credit support includes Rs. 5.22 crore in form of scheduled cash flow subordination (assuming zero prepayments) – including Rs 3.55 crore of principal overcollateralisation |
| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||
Criteria Details
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