Citi Spv Pass-Throughs Get Crisil Aaa(So)

The Credit Rating and Information Services of India Ltd (Crisil) has assigned a 'AAA (SO)' rating to the Rs 20.41 crore 10-year pass through certificate (PTC) backed by housing loan mortgages instituted by Citibank.

The PTC is proposed to be issued by People's Financial Services Ltd (PFSL), the special purpose vehicle (SPV) for the housing loan securitisation programme of Citibank. The credit enhancement would be in the form of subordination of the excess interest strip (EIS) and cash collateral to the extent of Rs 61 lakh.

The pool backing the PTC consists of 425 housing loans, with a projected principal outstanding of Rs 20.41 crore and remaining tenure of the pool is 9 years and 11 months as on July 31. The total receivables from the pool during this period comes to Rs 33 crore. The pool does not contain any delinquent contracts and has a loan-to-value ratio of 56 per cent as of June 30. The entire future receivables of the pool would be transferred by Citibank to PFSL.

During the tenure of the PTC, every month, the investors will be entitled to receive the principal component of the scheduled monthly pool receivables and interest at the specified coupon rate.

This issue of PTC comes after the successful placement of the pilot mortgage-backed security (MBS) programme of Citibank. The issue was rated AAA(so) by Crisil. The issue had been oversubscribed by commercial banks and was successfully closed in April 2001.

Crisil has so far rated seven tranches of MBS, amounting to a total volume of over Rs 250 crore in the last year-and-a-half. The issues were backed by mortgages originated by Housing Development and Finance Corporation, LIC Housing Finance, Can Fin Homes and Citibank.