TEXT-Fitch affirms STFCL-assignment of loan receivables program

(The following statement was released by the ratings agency)

Oct 6 - Fitch Ratings has today affirmed the ratings assigned to STFCL-Assignment of Loan Receivables Programme 2007, and assigned a Loss Severity rating, as follows:

INR3,732.9m Senior series affirmed at 'AAA(ind)(SO)'; Outlook Stable; Loss Severity rating assigned at 'LS1'.

INR515.9m Second loss credit facility affirmed at 'BBB(ind)(SO)'; Outlook Stable.

The affirmations are based on the level of credit enhancement and the good performance of the underlying collateral, which consists of loans extended by Shriram Transport Finance Company Limited (SRTR.BO: Quote, Profile, Research) ('AA(ind)'/'Stable'/'F1+(ind)') for the purchase of new and used commercial vehicles. As of August 2009, a total of INR870.3m was available as credit enhancement, via the first loss credit facility (INR354.4m) in the form of fixed deposit, and the second loss credit facility (INR515.9m) in the form of unconditional and irrevocable guarantee by Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research) ('AA-'/'Negative'/'F1+').

According to the latest payout report dated 10 August 2009, loans delinquent by more than 90 days accounted for 1.1% of the current portfolio, while 51.6% of the original pool remained outstanding. The cumulative collection efficiency from closing to July 2009 was 99.2%. For the month of July 2009, the overdue collection efficiency was 68.6% and the current collection efficiency was 82.7%. Monthly prepayment rates have been low, averaging around 0.1% since closing. The risk of high principal loss due to prepayments in this premium structure transaction is therefore considered to be remote.

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.

Applicable Criteria available on Fitch's website at www.fitchratings.com: "Rating Criteria for Indian Asset Backed Securitisations", dated 14 July 2009, 'Global Structured Finance Rating Criteria', dated 30 September 2009 and 'Criteria for Structured Finance Loss Severity Ratings', dated 17 February 2009.