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ICRA assigns LAAA (SO) rating to purchaser payouts backed by TML

Written by: Staff

New Delhi, Mar 17 (UNI) ICRA today assigned conditional LAAA (SO) rating, to the Rs 793 crore purchaser payouts backed by commercial vehicle loan receivables originated by Tata Motors Ltd (TML).

The rating is the highest-credit-quality rating assigned by ICRA and the rated instrument carries the lowest credit risk.

The rating is based on the strength of cash flows from the underlying asset pool, the available credit enhancement in the form of an unconditional and irrevocable bank guarantee and the integrity of the legal structure.

The rating is subject to the fulfilment of all conditions under the structure and the review of documentation pertaining to the transaction by ICRA.

The structure for the present transaction envisages direct assignment of the selected commercial vehicle loan receivables to the purchaser. The transfer would be at a premium.

During the first twelve months in the tenure of the pool, the scheduled payouts to the purchaser have been staggered as 70 per cent, 30 per cent and payable in months M+1 and M+2.

This makes the purchaser payouts more aligned with the expected collections in the pool and improves the liquidity in the transaction.


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