Kotak Sews Up Asset-Backed Securitisation At Lowest Rate

Kotak Mahindra Finance Ltd (KMFL) mobilised Rs 104.89 crore at annualised average cost of 8.19 per cent through its second securitisation transaction of commercial vehicle receivables. This is the lowest-ever rate at which asset backed securitisation has been done.

Kotak Mahindra Capital company was the advisor and sole arranger for the above issue of the pass through certificates (PTCs) in the securitisation deal.

The issue, launched on book-building basis on August 12, was closed on August 23, ahead of the scheduled closing date of August 28.

KMFL offered four instruments for an issued size of Rs 77.51 crore. Considering the investors' response, KMFL decided to retain Rs 104.89 crore including the greenshoe option of Rs 27.38 crore.

 

For KMFL, the average cost for a pool of commercial vehicle loans with maximum maturity up to 34 months works out to 8.19 per cent. The issue was rated AAA (SO) by Crisil and ind AAA (SO) by Fitch.

Under this transaction, KMLF would assign commercial vehicle receivables to the special purpose vehicle -- the ABS 2002 series II Trust.

The Trust will purchase the receivable from KMDL and issue pass through certificate to the investors. UTI Bank is the trustee for the Trust.

The commercial vehicle division of KMFL provides finance against commercial vehicles to fleet owners, captive users and small road transport operators. The portfolio of disbursements of this division have grown from Rs 83 crore in 1998-99 to Rs 504 crore in 2001-02.