Icra downgrades DHFL's PTCs ratings

Rating agency Icra has downgraded the purchaser payouts/pass through certificates (PTCs) issued under six mortgage loan securitisation transactions by Dewan Housing Finance Corporation (DHFL).

The rating of these instruments have been downgraded from BBB (SO) to AA -(SO).

The mortgage lender had initially issued these instruments worth Rs 1,689.4 crore and the amount left after April 2019 pay out stands at Rs 646.9 crore.

The ratings for these transactions continue to be on watch with developing implications, the agency said in a note.

The pools comprise of receivables from housing loan contracts.

The rating downgrades of the PTCs follows the recent rating action taken by the rating agency on the servicer in these transactions, DHFL.

The receivables have been assigned to the respective trusts at par.

The rating agency said while the pool receivables are bankruptcy remote from the originator post assignment to the trust, DHFL continues to be the servicer in these transactions with no back-up servicing arrangement being in place.

A sustained deterioration in the credit profile of the DHFL could have an impact on its operations and thus its servicing ability, it said.

This in turn could adversely impact the collection performance of the underlying pools, which has remained strong till March 2019 collection month, the rating agency said.

Icra has revised the rating on the commercial paper worth Rs 850 crore of DHFL from A3+ Watch with Negative Implications to A4 Watch with Negative Implications on Monday.