Citibank Securitisation Deals Top Rs 1000 Crores

Citibank India has crossed the Rs 1,000-crore securitisation threshold in January. This follows the securitisation of a Rs 87-crore issuance of commercial vehicle hire-purchase receivable of Tata Engineering. It is now executing other mandates including Ashok Leyland's Rs 104 crore deal that has opened in the market and has a greenshoe option of Rs 34 crore.

Citibank managing director, global corporate and investment banking, Sanjay Nayar said: "While the bank has been securitising its own portfolio since 1991, it has been focusing on developing securitisation as a core product offering for our corporate customers in the last 12 months".

Securitisation has opened up new and sustainable avenues of fund raising for corporates, banks and non-banking finance companies in India. "It helps customers manage their balance sheets efficiently by maximising utilisation of scarce capital, allowing them to raise funds at an efficient price from capital market investors," said Nayar.

Market sources said many banks are looking at securitising their assets to shore up their capital adequacy ratios. ICICI has also opted for securitisation to sell its assets to meet the statutory liquidity ratio and cash reserve ratio in its run up to become a universal bank.

Citibank has structured and arranged securitisation of auto loans, construction equipment and mortgage backed receivables originated by clients or the bank itself. Once the Securitisation Bill is passed in the budget session, more deals are expected to come through.

Said Citibank head of structured finance Sanjay Aggarwal: "In the months to come, we will see much larger deals along with continuing innovations such as collaterised debt obligations, collateralised mortgage obligations and conduit structures".