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ALF securitises Rs. 702 cr. receivables

By Our Special Correspondent

CHENNAI DEC. 30. Ashok Leyland Finance (ALF) has securitised receivables totalling over Rs.702 crores so far during the current financial year and is hoping to do a further Rs. 250 crores by March 2003.

In all, it had concluded a dozen securitisation deals during April-December 2002. Out of these, seven are rated by CRISIL with a AAA (SO) rating, totalling Rs.520 crores. These transactions are done on a without recourse basis. The balance five deals — aggregating Rs.182 crores — are unrated ones.

In December alone, ALF has sewed up five transactions worth Rs.284 crores. Out of these, two are rated bilateral deals worth Rs.200 crores. The rest are unrated bilateral ones totalling Rs.84 crores. The December deals are concluded with UTI Bank (Rs.122 crores), Indusind Bank (Rs.22 crores) and HDFC Bank (Rs.58 crores). Two deals are struck with the GE Capital group for a total amount of Rs. 82 crores.

According to S. Nagarajan, Managing Director, of the company, ALF planned to raise Rs.700 crores through securitisation of its receivables during 2002-03. He indicated that ALF would plan for another Rs.200-250 crores programme during the final quarter of the current financial year. The proposed deals would be done either on private placement basis or done bilaterally via pass through certificate and with SPV (special purpose vehicle) as trustees with no recourse basis to ALF. According to him, the securitisation tool did help ALF bring down the pressure on capital adequacy. ALF, according to N. Sampathkumar, Executive Director (Finance), had done 78 deals totalling over Rs.3,000 crores in the last seven years. Today, the share of ALF among the rated securitisation papers in the transport sector was in the vicinity of around 41 per cent. Mr. Nagarajan said close to 20 per cent of ALF's receivables were securitised. The company would ideally take up this percentage to 25 per cent, he added.

The rated deals have been securitise on either a private placement or bilateral basis through issuance of pass through certificates to investors of assorted kinds. These receivables are usually sold to a trust that acts as SPV for each such deal.

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