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Published on 28/10/2021 5:30:01 PM | Source: PR Agency

Indiabulls Housing Finance Ltd : Outstanding Ratings Affirmed; by Brickwork

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Brickwork Ratings converts provisional ratings for the PTCs of Rs 2780.35 Crs issued by “Mortgage LAP Securitization Trust” backed by loan against properties (LAP) and housing loan receivables originated by Indiabulls Housing Finance Limited (IBHFL) and its wholly owned subsidiary Indiabulls Commercial Credit Ltd (ICCL) to final ratings as under.

Detailed Rationale

Brickwork Ratings (BWR) had assigned Provisional 'BWR BBB (SO)/Stable' ratings for the Series A1 PTCs of Rs 950 Crs and Provisional 'BWR BBB- (SO)/Stable' ratings for Series A2 PTCs of Rs 600 Crs , Provisional 'BWR BB+ (SO)/Stable' ratings for Series B1 PTCs of Rs 300 Crs and Provisional 'BWR BB (SO)/Stable' ratings for Series B2 PTCs of Rs 930.35 Crs backed by loan against properties and housing loan receivables originated by “Indiabulls Housing Finance Ltd” (IBHFL) and its wholly owned subsidiary “Indiabulls Commercial Credit Ltd” (ICCL) as tabulated above. The above provisional ratings were to be converted to final ratings on closure of the transaction and the receipt of the following executed documents/information, which have been received by BWR.

BWR has received copies of the following documents:

* Trust deed

* Deed of assignment

* Power of attorney

* Information memorandum

* Legal opinion

* Trustee’s awareness letter

* Auditor’s certificate

* Cash Collateral Agreement

Additionally, the company has shared a copy of confirmation of creation of cash collateral in the form of unencumbered fixed deposits lien marked to the trust. The securitisation Transaction was closed on September 29, 2021. On receipt of all the executed documents/deeds and internal as well as external legal opinion confirming that all the documents are in order; which confirms with the information shared with BWR at the time of initial rating, BWR has converted the provisional ratings to final rating as follows: 'BWR BBB (SO)/Stable' ratings for the Series A1 PTCs of Rs 950 Crs and 'BWR BBB- (SO)/Stable' ratings for Series A2 PTCs of Rs 600 Crs , 'BWR BB+ (SO)/Stable' ratings for Series B1 PTCs of Rs 300 Crs and 'BWR BB (SO)/Stable' ratings for Series B2 PTCs of Rs 930.35 Crs.

A trust in the name of “Mortgage LAP Securitization Trust” has been created which will be the issuer of PTCs and Catalyst Trusteeship Limited (CTL) has been appointed as the trustee to monitor the transaction on behalf of the Trust/PTC holders. Cash collateral in the form of unencumbered fixed deposits, lien marked to the trust equivalent to 5% of Series A1 & A2 PTCs, is created with ICICI Bank for an amount of Rs 77.50 Crs The rating assignment takes into consideration the strength of cash flows of the underlying pool, credit enhancement available in the form of fixed deposits equivalent to 5% of Series A1 & A2 PTCs, excess interest spread of 0.25% per annum, minimum payout schedule for Series A1 & A2 PTCs and the payment mechanism of the transaction, originator servicing capabilities and soundness of the transaction's legal structure. However, the rating is constrained by the moderate track record of payments in the pool and higher tenure loans.

 

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