April 08, 2014
CRISIL assigns ‘CRISIL AAA (SO)’ to Shriram Transport Finance Company Ltd’s securitisation transaction

Details Yield Terms Issue Size (Rs. Million) Tenure# (Months) Rating/Credit Opinion Credit-cum-Liquidity Enhancement (Rs. Million) ^
Series A PTCs Fixed 9,973.4 54 CRISIL AAA (SO) 998.2*
Second Loss Facility - 499.1 CRISIL BBB (SO) Equivalent 499.1

#Actual tenure will depend on the level of prepayments in the pool and the exercise of clean-up call option.
^Additionally, scheduled excess interest spread, amounting to around Rs.1,085.4 million (assuming zero prepayments), provides credit support to the PTCs.
*Includes a second loss facility of Rs.499.1 million.

CRISIL has assigned its ‘CRISIL AAA (SO)’ rating to the pass-through certificates (PTCs) issued by Sansar Trust Feb 2014 –II and credit opinion of ‘CRISIL BBB (SO) Equivalent’ to the second loss facility. The pool is backed by vehicle loan receivables originated by Shriram Transport Finance Company Ltd (STFCL; rated ‘CRISIL AA/FAA+/Stable/CRISIL A1+’). The rating is based on the credit quality of the pool cash flows, STFCL’s origination and servicing capabilities, the transaction’s credit enhancement and payment mechanism, and the soundness of the transaction’s legal structure.

The receivables arise from a pool of loans for new and used commercial vehicles (CVs) and passenger vehicles originated by STFCL. The transaction has a ‘par’ structure. STFCL will assign the pool to Sansar Trust Feb 2014 –II, settled by IDBI Trusteeship Services Ltd, which will issue PTCs to investors. The PTCs receive support from the stipulated cash collateral and the excess interest spread.

About the Pool
The pool consists of vehicle loans, which have a good seasoning profile with a weighted average net seasoning of 10.4 months. The pool is geographically diversified, with the top three states in the pool together accounting for 48.3 per cent of the principal. 90.2 per cent of the principal is from contracts that are current on payments as on the pool cut-off date, with a weighted average loan-to-value ratio of 68.2 per cent and ticket size of Rs.0.48 million.

Rated Pools
CRISIL has outstanding credit opinions/ratings on 26 transactions originated by STFCL. The performance of all the pools is in line with CRISIL’s expectations.

About the Originator
STFCL, incorporated in 1979, is the flagship company of the Shriram group. The company is registered with the Reserve Bank of India as a deposit-taking, asset-financing non-banking financial company. STFCL predominantly finances CVs (both pre-owned and new) to the SRTO segment. It has also started financing purchase of tractors, passenger vehicles, earth-moving equipment, and large agricultural equipment, among others. The company has a pan-India presence, with 630 branches as on December 31, 2013.

For 2012-13 (refers to financial year, April 1 to March 31), STFCL reported a total income and a profit after tax (PAT) of Rs.65.6 billion and Rs.13.6 billion, respectively, as against Rs.58.9 billion and Rs.12.6 billion, respectively, for 2011-12. For the nine-months ended December 31, 2013, STFCL reported a total income, and a PAT of Rs.58.7 billion and Rs.9.7 billion respectively, and Rs.48.8 billion and Rs.10.1 billion respectively, for the corresponding period of the previous year.

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Last updated: May, 2013

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April 08, 2014