Fitch: No impact on Torque Securitisation from Documentation Amendment
Fitch previously identified some weaknesses in the transaction documentation where definitions and descriptions conflict, or where definitions include, in Fitch's view, manifest errors. These issues were to be amended - subject to noteholder consent - to reflect the structure by October 2014. The noteholder approval process has not yet been completed; however, this approval process, along with the amendments, is expected to be finalised by end-May 2015.
In addition, a performance covenant relating to the proportion of private obligors in the pool will be amended. Fitch has analysed the potential portfolio migration permitted by the amended covenant and has concluded that the structure is sufficiently robust to mitigate the additional risk presented by the modification.
The transaction is a securitisation of a revolving pool of auto loans originated in South Africa by Iemas Financial Services (Co-operative) Limited (Iemas, not rated). Iemas is the largest financial services trade co-operative in South Africa and has been originating auto loans since 1993 with a key strategy of targeting employer groups and offering loans and financial advice to the respective employees.
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