OREANDA-NEWS. June 15, 2015. Fitch Ratings has assigned final ratings to four Platinum Trust pass-through certificates (PTC). The issuance consists of notes backed by commercial-vehicle and tractor loans originated by Cholamandalam Investment and Finance Company Limited (CIFCL), which is also the servicer for the transaction. The ratings are as follows:

Platinum Trust January 2015 (Platinum Jan15)
INR2,704.5m Series A PTCs due June 2019: 'BBB-sf'; Stable Outlook

Platinum Trust February 2015 (Platinum Feb15)
INR2,175.9m Series A1 PTCs due March 2017: 'BBB-sf'; Stable Outlook
INR628.2m Series A2 PTCs due August 2019: 'BBB-sf'; Stable Outlook

Platinum Trust March 2015 - Tranche I (Platinum March15-1)
INR2,740.3m Series A PTCs due November 2019: 'BBB-sf'; Stable Outlook

Platinum Trust March 2015 - Tranche II (Platinum March15-2)
INR1,548.0m Series A1 PTCs due March 2017: 'BBB-sf'; Stable Outlook
INR 604.0m Series A2 PTCs due August 2019: 'BBB-sf'; Stable Outlook

The rating addresses timely payment of interest and principal in accordance with the payout schedule in the transaction documents. The scheduled payout will be net of the distribution tax on the income distributed by the trust to the PTC holders.

KEY RATING DRIVERS
The ratings and outlook reflect adequate external credit enhancement (CE) of the initial principal balance, and CIFCL's origination practices, servicing experience and expertise in collection and recovery of commercial-vehicle and tractor loans in India. The transaction is supported by a sound legal and financial structure.

The CE comprises a first-loss credit facility (FLCF) and a second-loss credit facility (SLCF) for all four transactions. The FLCF is in the form of fixed deposits with a bank rated 'BBB-/F3' by Fitch in the name of the originator with a lien marked in favour of the trustee. The SLCF is an unconditional and irrevocable guarantee provided by a bank rated 'BBB-/F3' by Fitch.

As of the May 2015 payout period, Platinum Jan15, Platinum Feb15, Platinum March15-1, and Platinum March15-2 have a CE of 15.64%, 15.83%, 14.51% and 15.28%, respectively. Two to four payouts have occurred since the closing of the four transactions, and no credit enhancement has been drawn since the transactions closed. The credit enhancement is deemed sufficient to cover the commingling risks of the servicer and the liquidity for the timely payment of the PTCs.

Taking the revised data from India's Central Statistical Office as the new reference, Fitch forecasts India's GDP growth to accelerate to 8.0% in the financial year ending 31 March 2016 (FY16) and 8.3% in FY17. While plenty of policy initiatives will likely have a positive effect on real GDP growth, including structural reforms and some fiscal and monetary policy loosening, it will take time for such measures to have an impact on growth. The government continues to roll out reforms that are likely to support the investment climate in the longer run. The central government's budget, presented on 28 February 2015, showed a continuation of this process and included efforts to reduce infrastructure bottlenecks.

The agency has factored this macroeconomic outlook into its analysis and its base-case default-rate assumptions. The default rate, recovery rate and time to recovery, together with the portfolio's weighted-average yield, were stressed in Fitch's Asia-Pacific ABS cash flow model to assess the sufficiency of cash flow for timely payment at the current rating level.

No interest-rate or foreign-currency risks exist in the transaction, since both the assets and the PTCs are fixed-rate and are denominated in rupees.

Each of the four transactions comprises a static seasoned portfolio of commercial-vehicle and tractor loans. For more information about the underlying portfolio of each transaction, please refer to the individual rating action commentaries for the assignment of expected ratings.

RATING SENSITIVITIES

Based on Fitch's sensitivity analyses for the four transactions, Fitch may consider downgrading the ratings to 'BBsf' if the base-case default rates increase by 30% or to 'BB+sf" if the base-case recovery rates decline by 30%. The sensitivity analysis assumes that the CE and other factors remain constant.

The rating may be upgraded if the ratings of the credit collateral bank holding the FLCF deposit and the guarantee bank providing the SLCF are upgraded to above 'BBB-' and the portfolio performance remains sound, with adequate CE that can withstand stress at above a 'BBB-sf' rating scenario.

At closing, CIFCL will assign commercial-vehicle and tractor loans to the issuer, which in turn will issue the PTCs. The PTC proceeds will be used to fund the purchase of the underlying loans.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

DATA ADEQUACY
Fitch conducted a file review of 20 sample loan files focusing on the underwriting procedures conducted by CIFCL compared to CIFCL's credit policy at the time of underwriting. No material discrepancies were noted in the underwriting practices of CIFCL. The file review also checked the accuracy of the data file provided to Fitch for its rating analysis. The file review reported no material errors that would impact Fitch's rating analysis.

Fitch reviewed the results of the agreed-upon procedures (AUP) conducted on the portfolio; the AUP checked the accuracy of the data file provided to Fitch for its rating analysis. The AUP reported no material errors that would impact Fitch's rating analysis.