Canfin Homes Securitised Float To Hit Mart Today

Canfin Homes, the housing finance subsidiary of Canara Bank, plans to hit the market with a securitised issue of Rs 58.19 crore tomorrow. The issue will be securitised against the home loan receivables of the company.

The mortgage-backed-securities consist of 'Class A' pass through certificates and carry an annualised coupon of 8.90 per cent, payable monthly.

The maturity of the securitised issue will be 82 months, while the average tenor is 42 months. The issue is rated LAAA (so) by Investment Information and Credit Rating Agency (Icra). The rating implies highest safety. The arrangers of the issue are ICICI Securities and Finance (I-Sec), SBI Capital Markets Ltd (SBI Caps) and UTI Securities. The issue will remain open till June 28.

 

According to corporate bond dealers, the issue is likely to receive a good response because of the rating and the easy liquidity condition in the market.

Said a dealer with an arranger: "In government securities, yields are already too low and, hence, investors will be interested in placing money in bonds. Moreover, because of the securitised nature of the issue, we are expecting a good response to it."

The secondary market for corporate bonds, however, has been quiet over the last one month because of the tension on the India-Pakistan border. However, dealers said the tension has receded and the trading volume is likely to increase during the week.

Meanwhile, Canfin Homes has reduced interest rates for a five-year loan to 10 per cent from 10.25 per cent. The rates for 6-10 year loans above Rs 2 lakh will now be 11.25 per cent compared with 11.75 per cent earlier. There is, however, no change in rates for 6-10 year and 11-15 year loans up to Rs 2 lakh, which remains at 10.75 per cent and 11 per cent, respectively.

The new interest rates for 16-20 years for loans up to Rs 2 lakh and above Rs 2 lakh is 11.5 per cent and 11.75 per cent. The variable interest rate for all periods and slabs stands reduced to 11 per cent from 11.5 per cent.