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| Fitch Affirms STFCL's Used CV Sept 08 Transaction; Assigns LS Rating |
| Announcement / Banking Sep 17, 2009, 19:56 IST |
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Fitch Ratings has affirmed STFCL's Used CV Sept 08 Transaction rating and assigned a Loss Severity rating, as follows:
INR1,939m senior series affirmed at 'AAA(ind)(SO)'; Outlook Stable; Loss Severity rating assigned at 'LS1'.
The affirmation is based on the level of credit enhancement and the good performance of the underlying collateral, which consists of loans extended by Shriram Transport Finance Company Limited ('AA(ind)'/Outlook Stable/'F1+(ind)') for the purchase of used commercial vehicles. As of August 2009, INR569.9m was available as credit enhancement in the form of a fixed deposit.
According to the latest payout report dated 10 August 2009, no loans were delinquent by more than 90 days and 69.0% of the original pool remains outstanding. The cumulative collection efficiency from closing to July 2009 was 98.6%. For the month of July 2009, the overdue collection efficiency was 83.3% and the current collection efficiency was 88.0%. Monthly prepayment rates have been low, averaging around 0.1% since closing. The risk of high principal loss due to prepayments in this premium structure transaction is therefore considered to be remote.
Rating Outlooks have been published for all newly issued Asia Pacific Structured Finance tranches since June 2008, and concurrently with rating actions for tranches issued prior to June 2008. Unlike a Rating Watch which notifies investors that there is a reasonable probability of a rating change in the short term as a result of a specific event, rating Outlooks indicate the likely direction of any rating change over a one- to two-year period.
Loss Severity criteria were published on 17 February 2009. For further details, please see "Criteria for Structured Finance Loss Severity Ratings", available at www.fitchratings.com.
Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(ind)' for National ratings in India. Specific letter grades are not therefore internationally comparable.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings currently maintains coverage of approximately 6,000 financial institutions, including over 3,200 banks and 2,200 insurance companies. Finance & leasing companies, broker-dealers, asset managers, managed funds, and covered bonds make up the remainder of Fitch Ratings’ financial institution coverage universe.
Fitch India has Five rating offices located at Mumbai, Delhi, Chennai, Kolkata and Bangalore. Fitch is recognised by Reserve Bank of India, Securities Exchange Board of India (SEBI) and National Housing Bank.
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