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First Ratings Tuesday gave HDFC Bank’s housing loan securitization trust an AA- (sri) rating for its capacity to meet interest payments and principal repayments.

First Ratings Tuesday gave HDFC Bank’s housing loan securitization trust an AA- (sri) rating for its capacity to meet interest payments and principal repayments. The rating applies to the Rs. 506 mn component of the Rs.722.2 mn (face value or total value of the deal including interest) deal which caries a floating rate of interest (linked to 3 month weighted average gross T-bill rate plus 150 - 175 basis points), with a coupon floor of 8 percent and a cap of 13 percent.
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AA-(sri) ratings indicate a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments.

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Fitch officials say this capacity is not significantly vulnerable to foreseeable events.

The two part securitization deal structured for Sri Lanka’s second largest housing financer will see the first Rs.
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506.4 mn issued to investors, with the bank subscribing to Rs. 199.8 mn, which will create a cushion for bad debts in the securitized pool of 3387 residential mortgage loans.

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