Fitch Ratings has affirmed the expected rating of 'AAA(ind)(SO)' with a Stable Outlook to the purchaser payouts in this direct assignment (DA) transaction. Fitch assigned an expected rating to the transaction on 2 March 2009. For further information, please refer to the release titled, "Fitch Assigns Expected Rating to STFCL's New CV - Feb 09 Assignment".
The affirmation follows changes to the priority of the payments resulting in a reduction of excess spread available for the benefit of the transaction. The New Commercial Vehicle (CV) loan pool assigned to the purchaser is originated by Shriram Transport Finance Co. Ltd. (STFCL, the "originator" or "seller", 'AA(ind)'/Stable).
The credit enhancement for the transaction is in the form of a fixed deposit provided by the originator equal to 18.4% of the future receivables as of the cut-off date. The available excess spread is now 2% of current principal outstanding over the investor coupon. The excess spread will be trapped and made available to the originator only at maturity, after all investor dues have been satisfied. There is also a liquidity facility of 3.2% of the future receivables.
The final rating is contingent upon receipt of final documents conforming to information already received.
A presale report for this transaction will be available shortly on Fitch's website, www.fitchindia.com.
Rating Outlooks have been published for all newly issued Asia Pacific Structured Finance tranches since June 2008, and concurrently with rating actions for tranches issued prior to June 2008. Unlike a Rating Watch which notifies investors that there is a reasonable probability of a rating change in the short term as a result of a specific event, rating Outlooks indicate the likely direction of any rating change over a one- to two-year period.
Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(ind)' for National ratings in India. Specific letter grades are not therefore internationally comparable.
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