ICICI Bank has carried out the country's largest rated securitisation transaction for an amount of Rs 1,929.9 crore, backed by its new and old car loans.
MUMBAI: Biggest private sector lender ICICI Bank has carried out the country's largest rated securitisation transaction for an amount of Rs 1,929.9 crore, backed by its new and old car loans.
The securities, Pass Through Certificates (PTC), backed by the new and used car receivables, originated from ICICI Bank and have been issued by Indian Retail ABS Trust under the bank's securitisation programme.
Credit rating agency Crisil has assigned the high investment grade rating (AAA) to these securities.
The bank would assign the pool to the trust and will receive a purchase consideration equal to the pool's principal outstanding.
"Including the credit opinions assigned to the liquidity and second loss facilities, the rated amount of Rs 1,992.99 crore is the largest in any securitisation transaction in India," a Crisil statement said.
The total rated amount consists of a liquidity facility of Rs 76.65 crore and a credit enhancement of Rs 77.75 crore.
The balance amount of Rs 1,837.6 crore is the loan amount, of which new car loan receivables comprise 81.6 per cent and used car loan receivables account for 18.4 per cent.
The pool has a weighted average season of 6.4 months and is well diversified. It is predominantly current with about 95 per cent of receivables coming from contracts that do not have any overdues on the cut-off date.
The investment grade ratings by Crisil for the PTCs are based on the credit quality of the pool cash flows, ICICI bank's origination and servicing capabilities, the transaction's credit enhancement and liquidity support, the payment mechanism and the soundness of the legal structure of the transaction.
The transaction is structured at par and is supported by credit enhancements in the form of credit collateral, subordination of excess interest spread and subordination of opening overdues. The structure envisages the payouts to be made to investors in the collection month itself by utilizing the liquidity facility.
Pass Through Certificates are in the nature of participation certificates that enable investors to take a direct exposure on the performance of the securitised assets.
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