February 4, 2016 / 6:08 AM / 3 years ago

Fitch Assigns Final 'BBB-sf' Ratings to Platinum Trust-September 2015

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Platinum Trust-September 2015 - Appendix here SEOUL/HONG KONG, February 04 (Fitch) Fitch Ratings has assigned final ratings to Platinum Trust-September 2015's pass-through certificates (PTC). The issuance consists of notes backed by commercial-vehicle and tractor loans originated by Cholamandalam Investment and Finance Company Limited (CIFCL), which is also the servicer for the transaction. The ratings are as follows: Platinum Trust-September 2015 INR3.84bn (closing INR 4.5bn) Series A PTCs due March 2020: 'BBB-sf'; Outlook Stable The rating addresses timely payment of interest and principal in accordance with the payout schedule in the transaction documents. The scheduled payout will be net of the distribution tax on the income distributed by the trust to the PTC holders. KEY RATING DRIVERS The ratings and Outlook reflect adequate external credit enhancement (CE) of the initial principal balance, and CIFCL's origination practices, servicing experience and expertise in the collection and recovery of commercial-vehicle and tractor loans in India. The transaction is supported by a sound legal and financial structure. The credit enhancement (CE) comprises a first-loss credit facility (FLCF) and a second-loss credit facility (SLCF). The FLCF is in the form of fixed deposits with banks rated 'BBB-'/'F3' by Fitch in the name of the originator with a lien marked in favour of the trustee. The SLCF is an unconditional and irrevocable guarantee provided by a bank-rated 'BBB-/F3' by Fitch. The transaction CE had increased to 13.4% in December 2015 from 11.5% in September 2015. This was due to the pass-through liabilities structure: the PTC balance outstanding was reduced to INR3.83bn in December 2015, from a closing INR4.5bn. CE is deemed sufficient to cover the commingling risks of the servicer and the liquidity for the timely payment of the PTCs. No significant change was made to the transaction since our expected rating held on 28 September 2015 - which warrants our reassessment of the transaction structure or the portfolio loss assumptions. RATING SENSITIVITIES Fitch may consider downgrading the ratings to 'BB+sf' if the base-case default rates were to increase by 30%, or to 'BB+sf' if the base-case recovery rates decline by 50%. The sensitivity analysis assumes that the CE and other factors remain constant. The rating may be upgraded if the ratings of the credit collateral bank holding the FLCF deposit and the guarantee bank providing the SLCF are upgraded to above 'BBB-' and the portfolio performance remains sound, with adequate CE that can withstand stress at above a 'BBB-sf' rating scenario. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY Fitch conducted a file review of 20 sample loan files focusing on the underwriting procedures conducted by CIFCL compared with CIFCL's credit policy at the time of underwriting. No major discrepancies were noted in the underwriting practices of CIFCL. The file review also checked the accuracy of the data file provided to Fitch for its rating analysis. The file review reported no substantial errors that would have an impact on Fitch's rating analysis. Fitch reviewed the results of the agreed-upon procedures (AUP) conducted on the portfolio; the AUP checked the accuracy of the data file provided to Fitch for its rating analysis, and reported no major errors that would affect Fitch's rating analysis. A description of the representations, warranties and enforcement mechanisms are included as an Appendix to the report. Contacts: Primary Analyst Keum Hee Oh Director Phone +82 2 3278 8373 Fitch Australia Pty Ltd. 9F Kyobo Securities Building 26-4, Youido-Dong Seoul, 150-737, Republic of South Korea Secondary Analyst Grace Li Associate Director Phone +852 2263 9936 Committee Chairperson Ben McCarthy Managing Director Phone +612 8256 0388 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available at www.fitchratings.com. The sources of information identified for this rating action was HSBC India as arrangers, and CIFCL. The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public. Applicable Criteria Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014) here Criteria for Rating Securitizations in Emerging Markets (pub. 06 Nov 2014) here Global Consumer ABS Rating Criteria (pub. 03 Dec 2015) here Global Structured Finance Rating Criteria (pub. 06 Jul 2015) here Related Research Platinum Trust-September 2015 - Appendix here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=999005 Solicitation Status here Endorsement Policy here ail=31 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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