* Linked to pool yield.
# Indicates door-to-door tenure. The actual tenure may be lower depending on the level of prepayments in the pool and exercise of clean-up call option.
^ Additionally scheduled excess interest spread amounting to Rs.1411.8 million (assuming zero prepayments) is also available to provide credit support to acquirers payouts.
CRISIL has assigned its credit opinion equivalent to a rating of AAA(so) to the acquirers payouts under the HDFC Assignment of Receivables March 2009 transaction.
HDFC Ltd (HDFC; rated AAA/FAAA/Stable/P1+ by CRISIL) will assign the pool to the acquirer for an initial consideration equal to the par value of the pool receivables. The transaction is backed by receivables from mortgage loans originated by HDFC.
The credit opinion is based on the credit quality of the pool cash flows, HDFCs origination and servicing capabilities, the credit-cum-liquidity enhancement, the payment mechanism, and the soundness of the transactions legal structure. The pool also receives support from the excess interest spread that is subordinated to the acquirers payouts.
About the pool:
The pool consists of predominantly floating rate contracts with an average net seasoning of 12.2 months.
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The loans have a maximum ticket size of Rs.2 million. The pool is geographically diversified with the top three states accounting for 52.9 per cent of the pool principal.
The pool comprises a high proportion (92.7 per cent) of salaried individuals, which is similar to HDFCs portfolio. Around 84 per cent of the contracts in the pool are current and no contract has overdues for more than two months as on the pool cut-off date.
Previously rated pools:
CRISIL has outstanding ratings on three securitisation transactions backed by mortgage loan receivables originated by HDFC.
All the pools have displayed good collection performance, with low delinquencies.
About the company:
HDFC was incorporated in 1977; its initial shareholders included the International Finance Corporation, Washington, and the Aga Khan Trust. Since its inception, HDFC has approved loans of Rs.1.88 trillion, and disbursed Rs.1.52 trillion, until March 31, 2008.
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In 2007-08, the company disbursed loans of Rs.329 billion, registering a growth of 25.6 per cent over the previous year. The company reported a profit after tax of Rs.24.4 billion in 2007-08 (refers to financial year, April 1 to March 31), as against Rs.15.7 billion in 2006-07, translating into a return on net worth of 27.8 per cent (31.3 per cent for 2006-07).
HDFC (along with its wholly-owned subsidiaries, HDFC Investments Ltd and HDFC Holdings Ltd) currently holds 23.26 per cent in HDFC Bank, an associate entity. In February 2008, HDFC Bank announced the merger of Centurion Bank of Punjab (CBoP) with itself, which is expected to result in dilution of HDFCs stake in the bank. To retain its stake in the bank at the existing level, HDFC would be required to invest about Rs.40 billion more.
Once this amount is invested, HDFCs investment in the bank would stand at around Rs.50 billion.