Sundaram Finance Limited

August 12, 2015
Mumbai

CRISIL reaffirms rating on the Pass Through Certificates (PTCs) and resets credit collateral under a securitisation transaction backed by commercial vehicle loan receivables originated by Sundaram Finance Limited

Transaction name Details Amount Rated (Rs. Mn) Outstanding Amount Rated (Rs. Mn)^* Original Tenure (Months) Balance Tenure (Months)^# Rating Credit support pre reset (Rs. Mn )^& Credit support post reset (Rs. Mn )^&
SHRI Trust D 2014 Series A PTCs 3,932.3 1,365.2 53 38 CRISIL AAA (SO) [Reaffirmed] 341.1 267.2

^*As of June 2015 payouts
^#Indicates door-to-door tenure; actual tenure will depend on the level of prepayments in the pool and the extent of shortfalls
^& Additionally scheduled excess interest spread (EIS) amounting to approx Rs 44.9 million (assuming zero prepayments) also provides credit support to Series A PTCs

CRISIL has reaffirmed its rating on the Series A Pass Through Certificates (PTCs) issued under the securitisation transaction ‘SHRI Trust D 2014’ at ‘CRISIL AAA (SO)’. The underlying receivables arise from a pool of new and used Heavy and Medium commercial vehicles (HMCV), and Light and Small commercial vehicles (LSCV) loans originated by Sundaram Finance Limited (SFL; rated ‘CRISIL AA+/FAAA/Stable/CRISIL A1+’).

The performance of the pool is in line with CRISIL’s expectations. The pool has seen a stable collection performance with a CCR of 96.5 per cent and a 3 month average MCR of 99.8 per cent as of June 2015 payouts. The healthy collection performance coupled with high amortisation of around 65.3 per cent has led to an increase in the credit cover available to the future PTC payouts from the cash collateral.

The cash collateral in the transaction has been reset. At the time of securitisation, this transaction had cash collateral of Rs. 341.1 million. Following the reset, Rs. 73.9 million (21.7 per cent of the initial cash collateral) will be released and the revised CE stands at Rs. 267.2 million. The cash collateral, after reset, remains commensurate with the outstanding rating on the pool. CRISIL has ensured its conformity to all aspects mentioned in the RBI reset guidelines.

Pool Performance Summary (as of June 2015 payouts)

Parameters SHRI Trust D 2014
Asset Class Commercial vehicle loan receivables
Months Post Securitisation 15
Balance Tenure (Months) 38
Principal Amortisation 65.3%
Cumulative Collection Ratio (%) 96.5%
Average Monthly Collection Ratio over Past 3 Months 99.8%t
Cumulative Prepayments 8.7%t
90+ Delinquency # 3.9%
180+ Delinquency^ 0.9%
Credit collateral utilisation 0.0%
Credit collateral as percentage of Future payouts before reset 23.8%
Threshold Collection Ratio (TCR)% 73.9%

^#90+ delinquency = (Overdues + principal outstanding of contracts overdue for more than 90 days) ÷ Initial pool principal ^{^}180+ delinquency = (Overdues + principal outstanding of contracts overdue for more than 180 days) ÷ Initial pool principal
^%Threshold collection ratio (TCR) = the minimum cumulative collection ratio (cumulative collections/cumulative billings) required on a pool’s future cash flows, to be able to service the PTC payouts on time.

About the Originator
Sundaram Finance, the flagship company of the Sundaram Finance group, commenced operations in 1954 as a wholly owned subsidiary of Madras Motor and General Insurance Company Ltd, a member of the TVS group of companies. Sundaram Finance was listed in 1972, when TVS sold its ownership to the public. Sundaram Finance is registered with the Reserve Bank of India (RBI) as a deposit-taking NBFC, and is classified by the RBI as an asset financing company. Sundaram Finance's core business is CV and car financing, which accounted for 86 per cent of its overall disbursements of Rs.99.1 billion for 2014-15. The company had a nationwide network of 589 branches and 3563 employees as on March 31, 2015.

For 2014-15, Sundaram Finance reported a total income and a net profit of Rs.23.7 billion and Rs.4.5 billion, respectively, against Rs.23.1 billion and Rs.4.4 billion, respectively, for the previous year. The Sundaram Finance group reported a total income and a net profit of Rs.42.9 billion and Rs.5.7 billion, respectively, for 2014-15, against Rs.41.2 billion and Rs.5.8 billion, respectively, for the previous year.

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Last updated: August, 2014

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August 12, 2015	http://www.crisil.com