Rating Rationale
February 15, 2017 | Mumbai
Sansar Trust Sep 2016 II
(Originator: Shriram Transport Finance Company Limited)
'CRISIL AAA (SO)/CRISIL BBB+ (SO) Equivalent' Converted from Provisional Rating to Final Rating for Series A PTCs and Second loss facility
Rating Action
Transaction Details Amount Rated
(Rs Crore)
Outstanding Amount
(Rs Crore)
Original Tenure (Months)# Balance Tenure (Months)# Credit Collateral^
(Rs Crore)
Ratings/ Credit Opinion& Rating Action
Sansar Trust Sep 2016 II Series A PTCs 290.96 290.96$ 54 50 33.41* CRISIL AAA (SO) Converted from Provisional Rating to Final Rating
Second loss facility 18.86 54 50 14.55 CRISIL BBB+ (SO) Equivalent
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
#Indicates door-to-door tenure between issuance date and legal final maturity date. Actual tenure will depend on level of prepayment in pool, exercise of clean-up call option and extent of shortfall.
&Series A1 PTC holders are entitled to receive timely interest and timely principal and Series A2 PTC holders are entitled to receive timely interest on a monthly basis. Series A2 PTC holders are entitled to receive timely principal once Series A1 PTC holders are paid out in full.
^Additionally scheduled excess interest spread (EIS) amounting to Rs.48.40 crore (assuming zero prepayments) also provides credit support to PTCs
*Includes a second loss facility of 20.89 crore
$Data as of January 2017 payouts
Detailed Rationale

CRISIL has converted the provisional ratings assigned to Series A1 PTCs, Series A2 PTCs and Second Loss Facility to final ratings of 'CRISIL AAA (SO)' to the PTCs and 'CRISIL BBB+ (SO) Equivalent' to Second Loss Facility. CRISIL had earlier assigned its 'Provisional CRISIL AAA (SO)' rating to Series A1 pass-through certificates (PTCs) and Series A2 PTCs, and 'Provisional CRISIL BBB+ (SO) Equivalent' rating to the second loss facility, issued by Sansar Trust Sep 2016 II, a trust settled by IDBI Trusteeship Services Ltd. The pool is backed by used and new commercial vehicles (CV), passenger vehicles (PV), three wheeler (3W) and construction equipment (CE) loan receivables originated by Shriram Transport Finance Company Ltd (STFCL; 'CRISIL AA+/FAAA/Stable/CRISIL A1+'). CRISIL has received the final legal documents executed for the transaction. The executed documents are in line with the transaction terms at the time of provisional rating. Hence, CRISIL has converted the provisional rating to final rating.
Please click on the link below for detailed information on CRISIL's policy on provisional rating: Revision in CRISIL policy for assigning 'provisional' ratings
As required, CRISIL has received the following final legal documents:

  • Trust Deed
  • Assignment Agreement
  • First Loss Credit Facility Agreement
  • Second Loss Credit Facility Agreement
  • Power of Attorney
  • Collection & Servicing Agency Agreement
  • Auditor's Certificate
  • Legal Opinion
  • Reps & Warranties from the Seller/Originator
  • Letter from Trustee

Key Rating Drivers and Description:
Supporting Factors

  • Credit Support available in the structure: Credit collateral of Rs.33.41 crore (9.2% of the pool cash flows) provide credit support to the PTCs. The PTCs also benefit from scheduled EIS and opening overdue subordination aggregating Rs.32.29 crore and Rs.1.27 crore respectively (8.9% and 0.3% of pool cash flows, respectively)

Constraining Factors

  • High proportion of less seasoned contracts: The pool has a low seasoning profile as evidenced by its weighted average net seasoning of 8 months. Maximum seasoning is 47 months.

CRISIL has adequately factored these aspects in its rating analysis
About the Pool
The pool consists mainly of CV (84%) contracts, as well as PV (7%) and CE (10%). At the time of securitisation, the pool had a weighted average net seasoning of 7.7 months, and weighted average original tenure of 46 months. Average ticket size of the pool was Rs 9 lakhs and weighted average loan-to-value ratio was moderate at around 77%
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 provides financing for vehicles such as CVs (both pre-owned and new), tractors, and passenger vehicles. It has pan-India presence, with 853 branches and 803 rural centres as on March 31, 2016.
STFCL's total income and profit after tax (PAT) were Rs 5260 crore and Rs 1180 crore, respectively, for fiscal 2016, against Rs 4500 crore and Rs 1030 crore, respectively, for fiscal 2015.
Past Rated Pools
CRISIL has outstanding credit opinions/ratings on 12 transactions originated by STFCL. CRISIL is receiving monthly performance reports pertaining to this transaction. The performance of the transactions has been in line with CRISIL's expectations.

Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL 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)
Type of Instrument Rated Amount (Rs Crore) Date of Allotment  
Maturity date*
Coupon Rate (%) (Annualised) Outstanding
Credit cum liquidity Enhancement$ (Rs Crore)
Series A PTCs 290.96 28-Sep-16 17-Apr-21 7.60 CRISIL AAA (SO) 33.41*
Second loss facility 18.86 17-Apr-21 - CRISIL BBB+ (SO) Equivalent 14.55
$Additionally scheduled excess interest spread (EIS) amounting to Rs.48.40 crore (assuming zero prepayments) also provides credit support to PTCs
*Includes a second loss facility of 18.86 crore
Annexure - Rating History for last 3 Years
  Current 2017 (History) 2016  2015  2014  Start of 2014
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Series A PTCs LT  290.96 CRISIL AAA (SO)   No Rating Change   07-10-16  CRISIL AAA (SO)   --   -- --
Second loss facility LT  18.86 CRISIL BBB+ (SO) Equivalent   No Rating Change   07-10-16   CRISIL BBB+ (SO) Equivalent   --   -- --
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
Links to related criteria
CRISILs rating methodology for ABS transactions
Evaluating risks in securitisation transactions - A primer
Legal analysis in structured finance transactions

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