Detailed Rationale CRISIL Ratings has assigned ‘Provisional CRISIL A+ (SO)’ rating to Series A1 SNs issued by Anax 2W 2024. The pool is backed by two-wheeler loan receivables originated by Manba Finance Ltd (Manba; not rated by CRISIL). The ratings are based on the credit support available to the PTCs, the credit quality of the underlying pool receivables, Manba’s origination and servicing capabilities, and soundness of the transaction’s legal structure.
The transaction has a ‘Par with Excess Interest Spread (EIS) with trigger-based turbo’ structure. The excess interest spread will be utilised to accelerate the principal redemption of Series A1 PTCs(till they are outstanding), if the PAR 90+ of the Pool exceeds 5.0% of the initial Pool Principal.
Series A1 SN holders are promised timely interest on a monthly basis and principal on ultimate basis on the maturity date of the SNs.
Investor payouts hare supported by cash collateral, over-collateralisation and subordination of excess interest spread (EIS). Manba will continue to service loan contracts in the pool as the servicing agent.
CTL has been appointed to monitor the transaction on behalf of the investors. |
Key Rating Drivers & Detailed Description Strengths:
− External cash collateral in the structure amounting to Rs 2.52 crore (10.0% of pool principal) provides credit support to Series A1 PTC. The PTCs also benefit from scheduled cashflow subordination (assuming zero prepayments) amounting to Rs 4.46 crore (17.7% of pool principal) for Series A1 PTCs
− Seasoning profile of contracts in the pool: The pool has a weighted average seasoning of 6.8 months and pre-securitisation amortisation of 19.6%. All of the 3,626 contracts in the underlying loan pool are current as of the cut-off date (November 05, 2024).
Weaknesses:
− The pool is backed by new two-wheeler loans, an asset class which has historically exhibited higher delinquency.
− 71.0% of the pool principal comprises contracts originated from Maharashtra, with the Mumbai being the top district. |
Liquidity: Strong Liquidity is strong given that the credit enhancement (internal and external combined) in the structure is sufficient to cover losses exceeding 1.5 times the currently estimated base shortfalls. |
Rating Sensitivity factors Upward Factors:
Downward Factors:
|
Additional disclosures for Provisional ratings: The provisional rating is contingent upon execution of the following documents:
Additional documents executed for the transaction, if any, should also be provided. The provisional rating shall be converted into a final rating after receipt of transaction documents duly executed within 90 days from the date of issuance of the instrument.
The final rating assigned post conversion shall be consistent with the available documents. In case of non-receipt of the duly executed transaction documents within the above-mentioned timelines, the rating committee of CRISIL Ratings may grant an extension of up to another 90 days.
Rating that would have been assigned in absence of the pending documentation: In the absence of pending documentation considered while assigning provisional rating as mentioned above, CRISIL Ratings would not have assigned any rating.
Risks associated with provisional nature of credit rating:A prefix of 'Provisional' to the rating symbol indicates that the rating is contingent upon occurrence of certain steps or execution of certain documents by the issuer, as applicable. In case the documents received and/or completion of steps deviates significantly from the expectations, CRISIL Ratings may take an appropriate action including placing the rating on watch or a rating/outlook change, depending on status of progress on a case-to-case basis. In the absence of the pending steps / documentation, the rating on the instrument would not have been assigned ab initio. |
About the Pool The pool cash flow is securitised and comprises receivables from new two-wheeler loans originated by Manba. The pool has a weighted average net seasoning of 6.8 months, weighted average LTV of 81.3% and top state Maharashtra accounting for 71.0% of pool principal. Average ticket size of the pool is Rs 86,333. All contracts in the pool are current as on the cut-off date.
Counterparty Details
|
About the Originator Manba Finance Ltd based in Mumbai, is an RBI registered NBFC which provides two-wheeler finance. The company started operations in 1996 as a DSA for ICICI Bank for two-wheeler loans till 2008, post which they started their own book. Manba is wholly owned by Mr. Manish Shah, either by himself or through group companies/relatives.
Manba has presence in four states: Maharashtra, Gujarat, Rajasthan, and Chhattisgarh. Over the due course of operations, the company has also acquired the preferred financier tag for Suzuki, Yamaha, TVS, Piaggio and Hero MotoCorp in its operating region.
|
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
$ISIN yet to be issued *Indicates door to door tenure. Actual tenure will depend on the level of prepayments in the pool, and exercise of the clean-up call option #Additional credit support includes Rs 4.46 crore in form of scheduled cash flow subordination (including EIS and over-collateralisation). |
| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||
| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||
Criteria Details
|