Detailed Rationale CRISIL Ratings has assigned its ‘Provisional CRISIL AA (SO)’ rating to Series A1 and ‘Provisional CRISIL A+ (SO)’ rating to Series A2 pass-through certificates (PTCs) issued by ‘Plutus 09 2002. The pool is backed by two-wheeler loan receivables originated by Muthoot Capital Services Limited (MCSL; ‘CRISIL A/CRISIL PPMLD A r/Stable/CRISIL A1’). The ratings are based on the credit support available to the PTCs, the credit quality of the underlying pool receivables, MCSL’s origination and servicing capabilities, and soundness of the transaction’s legal structure.
The transaction has a ‘par with monthly subordinated excess interest spread (EIS)’ structure, wherein the trust settled by a trustee will issue Series A1 PTCs and Series A2 PTCs in exchange for a purchase consideration equal to 91.51% of the pool principal at the time of securitisation.
Total credit support available in the transaction is as follows:
Series A1 PTC holders are entitled to receive timely interest on a monthly basis, while the principal payment is promised on an ultimate basis. Series A2 PTC holders are entitled to receive timely interest on a monthly basis once Series A1 PTC holders are paid out in full. The principal payment to Series A2 PTC holders is promised on an ultimate basis |
Key Rating Drivers & Detailed Description Strengths:
Weakness:
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Liquidity: Strong Liquidity position is strong given that the credit enhancement (internal and external combined) in the structure is sufficient to cover losses exceeding 1.5 times the currently estimated base shortfalls.
CRISIL Ratings has adequately factored these aspects into its rating analysis. |
Rating Sensitivity factors Upward
Downward
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About the pool The pool securitised comprises 2-wheeler loan receivables. The pool has weighted average net seasoning of 7.6 months (no of EMIs Paid). The pool is geographically concentrated with top three states accounting for 52.5% of pool principal. Average ticket size is Rs 68,229 with weighted average interest rate of 23.0%. All the contracts in the pool were current as on pool cut-off date (September 12th, 2022). CRISIL Ratings has adequately factored all these aspects in its rating analysis.
Additional disclosures for Provisional ratings: The provisional rating is contingent upon execution of the following documents, as applicable:
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 in line with its policy on provisional ratings.
Rating that would have been assigned in absence of the pending documentation: In the absence of documentation considered while assigning provisional rating as mentioned above, CRISIL Ratings would not have assigned any rating.
Risks associated with provisional nature of credit rating: A prefix of 'Provisional' to the rating symbol indicates that the rating is contingent upon execution of certain documents by the issuer, as applicable. In case the documents received deviates significantly from the expectations, CRISIL Ratings may take an appropriate action including placing the rating on watch or a rating change on a case to case basis. In the absence of the pending documentation, the rating on the instrument would either have been different or not assigned ab initio.
A rating rationale/report indicating the conversion of the ‘provisional’ rating into ‘final’ following receipt of all the required final legal documents will be published on the CRISIL website. Please click on the link below for detailed information on CRISIL’s policy on provisional rating: Revision in CRISIL policy for assigning ‘provisional’ rating.
Counterparty details
About the originator Incorporated in 1994, MCSL is a deposit-taking, systemically important non-banking financial company (NBFC). Though the company started operations in 1995, it commenced lending activities in 1998 after acquiring an NBFC license. Initially, it provided gold loans, but subsequently, as the group scaled up its gold financing business in MFL, MCSL entered the two-wheeler financing segment in fiscal 1998 and gradually exited the gold loan business. MCSL is listed on the Bombay Stock Exchange and the National Stock Exchange and is the only listed company of MPG. As on March 31, 2022, its AUM stood at Rs 2,056 crore. Around 98.5% of the total portfolio was two-wheeler loans.
Past rated pools CRISIL Ratings has outstanding ratings on six transactions originated by MCSL. CRISIL Ratings has received the legal documents for the transactions, and receives monthly performance reports pertaining to all CRISIL Ratings-rated MCSL originated securitisation transactions.
Key Financial Indicators
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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 *Additional credit support includes Rs. 31.02 crore in form of scheduled cash flow subordination (assuming zero prepayments) (25.5% of pool principal) for Series A1 PTCs and Rs 26.77 crore (22.0% of pool principal) for Series A2 PTCs |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Criteria Details
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