ICICI Bank today launched its first home loan securitisation programme of Rs 58 crore. This is a part of the overall churning process which the bank had announced earlier.
The issue which opened today is slated to close of July 4. "We are looking at private placements with banks and mutual funds. The coupon rate will be decided via book-building. We are looking at an annualised yield of 8.75 to 9.05 per cent," N S Kanan, head of treasury, said.
The issue has a tenure of 10 years with an average tenure of four years for the various classes of loans. Rating agency Crisil has rated the securities AAA(So). The securitisation also has a credit enhancement of 9.8 per cent. This loan portfolio is from the books of ICICI Home. ICICI Home has an outstanding home loan portfolio of Rs 1,500 crore. The new home loans are, however, now booked in ICICI Bank.
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"There are 1,400 loan contracts in this portfolio. The issue has two classes -- one class of loans of under Rs 5,00,000 of Rs 34 crore with another one of more than Rs 5,00,000 of Rs 24 crore. Banks can choose which type of loans to pick up depending on their requirement," added Kannan. This issue is being privately placed by the bank itself.
The bank will review its decision on securitising its home loan portfolio depending on market conditions. The bank has been selling down its corporate loan portfolio and by the end of June will have securitised Rs 800 crore to Rs 1,000 crore.