Fitch Affirms STFCL's Tractor Sept 08 Transaction; Assigns LS Rating

Fitch Ratings has affirmed the rating assigned to STFCL's Tractor Sept 08 Transaction and assigned a Loss Severity rating, as follows:

INR1,092.9m 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 new and used tractors. As at August 2009, INR377.5m was available 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 67.9% of the original pool remains outstanding. The cumulative collection efficiency from closing to July 2009 was 98.5%. During July 2009, the overdue collection efficiency was 75.2% and the current collection efficiency was 87.1%. 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.

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