The securities are backed by a pool of residential mortgage loans given by the Housing Development Finance Corporation Bank of Sri Lanka, which is rated 'BBB+(lka)' with a negative outlook.
"The affirmation is based on the high level of credit enhancement available to the series A note holders and the strong performance of the pool to date," Fitch said.
"The rating is constrained by the transaction's dependence on HDFC for servicing of the underlying collateral, and the lack of a predefined alternative servicer."
Credit enhancement is though excess collateralisation (pool principal in excess of Series A principal) and a cash reserve.
Due to excess interest receipts and principal prepayments from the collateral being used to redeem 'series A' note principal as per the deal structure, th