Microfinance Focus, October 18, 2011: CARE Ratings has assigned a provisional rating of ‘CARE A1+ (SO)’ to the Series A1 PTCs issued by Indian Microfinance Loan Receivables Trust in September 2011 backed by microfinance loan receivables originated by SKS Microfinance Limited.

The assigned pool consists of 37,219 microfinance loan contracts aggregating to principal outstanding of Rs. 37.46 crore. The average loan amount is Rs. 11,328 and there are no overdue in the pool.

The top three states contribute 43.32% and the top ten branches contribute 5.43% of the pool principal.

SKS has assigned the identified pool of microfinance loan receivables to a special purpose vehicle (SPV)/ Trust – IMLRT September 2011. The transaction is structured at par. The PTC payouts would be made on a monthly basis. The transaction envisages ultimate payment structure. SKS will act as the Servicer to the transaction.

The CARE rating is based on the credit quality of the underlying loans; the transaction structure and defined payment mechanism; support in the form of credit cum liquidity enhancement facility; the sound legal structure  of the transaction and the track record & good performance of SKS.

As on March 31, 2011 SKS had an outstanding loan portfolio of Rs.4,111 Cr and net worth of Rs.1,735 Cr. SKS reported income of Rs.1,269.5 crore and net profit of Rs.111.6 crore for FY11. The company is, currently, rated as CARE A1 (Under Credit Watch) for short-term obligations.