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ICRA assigns highest credit quality rating to SFL

Written by: Staff

New Delhi, Apr 17 (UNI) Credit rating agency ICRA has assigned its highest-credit-quality rating LAAA (SO) to Sundaram Finance Ltd (SFL) for its two purchaser payouts backed by commercial vehicle, cars and jeep loan receivables.

The rating is based on the strength of cash flows from the respective underlying asset pool, the available credit enhancement in the form of cash collateral and the integrity of the legal structure.

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

Both the transactions envisage direct assignment of the selected commercial vehicle, cars and jeep loan receivables to the respective purchaser. The transfer would be at a premium. During the tenure of the pool, the scheduled payouts to the purchaser have been staggered as 80 per cent and 20 per cent payable in the months M+1 and M+2 respectively.

SFL, one of the largest Non-Banking Finance Companies (NBFCs) in the country, focuses on financing of retail purchases of cars and commercial vehicles. Commercial vehicle finance, SFL's core activity, accounted for nearly 2/3rd of its total asset base of Rs 4,780 crores as on March 31, 2005.

The company has been rated LAA+ by ICRA for its non-convertible debenture programmes.


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