CRISIL's credit opinion for TATA MOTORS direct assignment of loan receivables

CRISIL has assigned a credit opinion equivalent to a rating of AAA (so) to Tata Motors Limited's (TML) assignment of receivables programme. The credit opinion is based on the credit quality of the pool cash flows, TML's origination and servicing capabilities, the available enhancement and the soundness of the legal structure.

Credit Enhancement: The transaction involves assignment of receivables to the acquirer in exchange for an initial purchase consideration. The credit-cum-liquidity enhancement for the transaction shall be in the form of subordination of collections from opening overdues in the pool and cash collateral of Rs. 121.0 million (8.7 per cent of the acquirer's payouts).

About the pool: The pool consists of commercial vehicle (CV) loan receivables sourced through Tata Motors' direct origination channel. The pool is characterised by moderate seasoning (of 5.4 months) and geographical diversity.

Performance of past pools: CRISIL has rated 29 pools originated by TML and erstwhile Tata Finance. All the pools have shown stable collection performance with credit-cum-liquidity enhancement utilizations in line with CRISIL's expectations.

Tata Motors Limited is a part of the Tata Group, which is amongst the largest and most diversified business groups in India with interests in wide range of products and services including steel, power, telecom, automobiles etc. It is the largest manufacturer of Commercial Vehicles in India with a wide range of products covering the medium and heavy commercial vehicle (M & H CV) and light commercial vehicle (LCV) cars in India.