August 28, 2007 (LBO) – Fitch Ratings Lanka has confirmed the AA (lka) rating on HDFC Bank Series A mortgage backed securities, the rating agency said. The rating relates to the timely payment of interest and the ultimate payment of principal on Series-A certificates issued by the Home Loan Securitisation Trust 2005 (HLST), a special purpose vehicle managed by Deutsche Bank A.G. (Colombo Branch), Fitch said in a statement.
The pass through securities are backed by a pool of housing loans that were originated by HDFC Bank which has been rated ‘A(lka)’ with a Stable outlook.
“The affirmation is based on the robust performance of the transaction to-date, the availability of credit enhancement to Series-A investors in the form of high over-collateralisation, excess interest spread (EIS), a liquidity reserve held at Citibank N.A – Colombo Branch, and the relatively strong credit quality of the underlying collateral,” Fitch said.
EIS is the interest collected on the underlying pool less coupon interest paid on Series-A.
Fitch said that although the asset quality of the underlying pool “deteriorated somewhat” it does not see it as a serious