Kairo 2024 (Originator: Satin Creditcare Network Limited) 'Provisional CRISIL AA+ (SO)' assigned to Series A1 PTCs
Rating Action
^Additional credit support includes Rs 18.14 crore in the form of excess interest spread and Rs 17.02 crore in the form of principal overcollateralization for Series A1 PTCs @A prefix of 'Provisional' indicates that the rating centrally factors in the strength of specific structures, and is contingent upon occurrence of certain steps or execution of certain documents by the issuer, as applicable, without which the rating would either have been different or not assigned ab initio. This is in compliance with a May 6, 2015 directive ‘Standardizing the term, rating symbol, and manner of disclosure with regards to conditional/ provisional/ in-principle ratings assigned by credit rating agencies' and April 27, 2021 circular ‘Standardizing and Strengthening Policies on Provisional Rating by Credit Rating Agencies (CRAs) for Debt Instruments’ issued by Securities and Exchange Board of India (SEBI). Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. 1 crore = 10 million Refer to annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has assigned its ‘Provisional CRISIL AA+ (SO)’ rating to Series A1 pass-through certificates (PTCs) issued by ‘Kairo 2024’ under a securitisation transaction originated by Satin Creditcare Network Limited (SCNL; Not rated by CRISIL).
This transaction is backed by a pool comprising microfinance loan receivables originated by SCNL. The ratings are based on credit quality of the pool cash flow, origination, and servicing capabilities of SCNL, credit support available to the PTCs, payment mechanism for the transaction, and soundness of the transaction’s legal structure.
The transaction has a ‘par’ structure wherein the seller will assign the loan receivables to ‘Kairo 2024’ in exchange for a purchase consideration, which is equal to 87.5% of the pool principal. Series A1 PTCs are entitled to receive timely interest on a monthly basis and principal on ultimate basis. |
Key Rating Drivers & Detailed Description Strengths:
Weakness:
[1]2 biweekly instalments taken as 1 emi |
Liquidity: Strong Liquidity is strong given that the credit enhancement available in the structure is sufficient to cover losses exceeding 1.5 times the currently estimated base shortfalls |
Rating sensitivity factors Upward factor:
Downward factor:
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About the Pool The transaction is backed by microfinance receivables originated by SCNL. The contracts in the pool have weighted average seasoning of 7.2 months, consequently, the pool is amortised by 26.8% as of the cut-off date. The pool is geographically concentrated with the top 3 state accounting for 70.2% of pool principal. The average ticket size for contracts in the pool is Rs 48,790, with a weighted average interest rate of 24.9%. All the contracts in the underlying loan pool are current as of the cut-off date (August 02, 2024)
CRISIL Ratings has adequately factored all these aspects in its rating analysis
Counterparty Details The table below lists parties to the transaction, the capacities in which they are involved, and the impact of their non-performance on the ratings on the PTCs.
Additional disclosures for the provisional rating The provisional rating is contingent upon execution of the following documents:
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 in line with its policy on provisional ratings.
Rating that would have been assigned in absence of the pending documentation: In the absence of 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 execution of certain documents by the issuer, as applicable. In case the documents received deviates significantly from the expectations, CRISIL Ratings may take an appropriate action including placing the rating on watch or a rating change on a case-to-case basis. In the absence of the pending documentation, the rating on the instrument would either have been different or not assigned ab initio. |
About the Originator Satin Creditcare Network Limited (SCNL or Satin) is a leading microfinance institution (MFI) in the country with presence in 26 states & union territory and around 95,000 villages. The company’s mission is to be one stop solution for excluded households at the bottom of the pyramid for all their financial requirements. The company also offers financial products in the Non‐MFI segment comprising loans to MSMEs and housing finance through its subsidiaries Satin Finserv Ltd. and Satin Housing Finance Ltd.
Key Financial Indicators
*annualised |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instruments
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||
Criteria Details
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