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CIFC completes securitisation of Rs. 85 crores
By Our Staff Correspondent
MUMBAI,
JAN. 6.
Cholamandalam Investment and Finance Company (CIFC) has completed a first of its kind securitisation of Rs. 85.40 crores of its auto loan portfolio late last week, Citibank N.A. the arranger, announced today.
This is the first transaction in India where a yield reserve has been used for taking care of interest rate mismatches. As the underlying receivables from the auto loans carried a fixed interest rate and the Pass Through Certificates (PTCs) offered floating rate to investors, the structure incorporated a yield reserve sized by the rating agency to cover the basic risk. Another innovation driven by investor demand was staggered payment of prepayments on the pool to reduce unscheduled payments to investors.
The special purpose vehicle (SPV) called Asset Securitisation Trust December 2004 issued six series of PTCs to investors rated AAA (so) by Crisil. All the six series issued were parri-passu senior PTCs. The senior PTCs are structured to receive semi-annual payments and have a door-to-door maturity of about two years with floating rate coupons linked to the local benchmark MIBOR (Mumbai Inter Bank Offer Rate).
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