Microfinance Focus July 14, 2011: Credit rating agencies ICRA and CRISIL, have upgraded the ratings assigned to IFMR Capital’s Senior Pass Through Certificates (PTCs) and Assignee Payouts pertaining to three transactions backed by micro loan pool receivables.

The receivables were originated by Grama Vidiyal Microfinance Limited and two transactions backed by micro loan pool receivables – one originated by Satin Creditcare Network Ltd. and one by Janalakshmi Financial Services Private Limited respectively.

The ratings upgrade reflect the good collection performance on the underlying pools so far, and enhanced credit enhancement cover for the rated instruments / payouts over the balance tenure.

In case of all the three aforementioned transactions, the selected pool comprised of unsecured micro loans (less than or equal to Rs. 20,000 each), with low initial tenure of contracts (50 weeks), moderately high initial seasoning and no overdue. Moreover, the pools comprised of General Loans only.

CRISIL upgraded Satin Creditcare Network Ltd ratings on the Series A1 and Series A2 PTCs issued by Theta Pioneer IFMR Capital 2011 to ‘P1+(so)’ from ‘P2+(so)’, and to ‘P3+(so)’ from ‘P4(so)’ respectively.

The PTCs were backed by microfinance loan receivables originated by Satin Creditcare Network Ltd. The upgrade was driven by strong collection performance together with low overdue level of the pool, which led to an increase in the cover provided for the PTC payouts by the available credit collateral.

CRISIL upgraded Janalakshmi Financial Services Private Limited rating on Series A1 pass-through certificates (PTCs) issued by Iota Pioneer IFMR Capital 2011 to ‘P1+(so)’ from ‘P1(so)’. The PTCs were backed by microfinance loan receivables originated by Janalakshmi Financial Services Pvt Ltd (JFSPL; rated ‘BB+/Stable’ by CRISIL).

The upgrade was driven by the underlying pool’s strong collection performance and current amortisation level, which led to an increase in the cover available for the PTC payouts. Available cash collateral covers 52.5 per cent of the Series A1 PTCs’ payouts.