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OPC raises funds in 1st equipment lease rental securitization

Press Trust of India  |  Mumbai 

In a first for the Indian securitisation market, an asset solutions company has raised money by securitising future rent receivables from Reliance Retail in a Rs 5,000-crore transaction, according to rating agency

In the equipment lease rental securitisation transaction, OPC Asset Solutions, which is being paid by against the bundled handset sales, has raised the money against the future receivables.

Pass through certificates (PTCs) backed by the rentals due from are created in a special trust called

"The lease payments from to the Trust would happen at periodic intervals over a period of three years," Icra, which has rated the PTCs as 'AAA(SO)', said in a statement.

Terming it as a landmark transaction, its for structured Vibhor Mittal said, "The underlying asset class is equipment lease rentals - a new asset class in the Indian Securitisation market. The issue size at Rs 5,000 crore is the single largest issuance of securitised paper in the country."

He added such a transaction shows the confidence of the mutual fund investors in the space.

said there are credit strengths like a gap of 10 business days between the due dates of the rental payments and the corresponding PTC payout dates and also strong credit profile of Reliance Retail, an arm of

On the weakness front, it pointed out to absence of an external credit enhancement in the event of any shortfall or significant delay in payment of the equipment lease rentals, as a potential risk.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 00:15 IST