OREANDA-NEWS. August 11, 2015.  Fitch Ratings has affirmed iNdwa Investment Limited's (iNdwa) asset-backed commercial paper's (ABCP) National Short-term rating at 'F1+(zaf)', following a review of the programme.

iNdwa is a South African hybrid ABCP programme structured to issue ZAR-denominated ABCP up to a maximum programme limit of ZAR15bn and tenor of 364 days to fund the purchase of ZAR-denominated financial assets and rated securities. As at end-June 2015, iNdwa had ZAR2.3bn of ABCP outstanding with an average tenor of 50 days. The underlying asset profile of the conduit is composed mainly of corporate loans (99%), and permitted investments (1%).

KEY RATING DRIVERS
The transaction benefits from structural protection through programme-wide credit enhancement (PWCE). PWCE is sized at 5% of financial assets and a dynamic percentage of rated securities based on the credit quality of the securities portfolio.

Any deficiencies in cash flow due to liquidity mismatches of CP and the underlying assets are provided for by the liquidity facility.

The CP's rating is supported by the credit quality of First Rand Bank (FRB; AA(zaf)/Stable/F1+(zaf)), through its Rand Merchant Bank (RMB), as liquidity provider, hedge counterparty and credit enhancement provider. Fitch believes the servicing capabilities, administrative procedures and credit policies of RMB are in line with its peers.

The credit quality of each asset on the underlying portfolio is commensurate with a 'AA-(zaf)' rating or above. In case of deteriorating credit quality, RMB is obliged to either dispose of any asset within 15 days or to post additional credit enhancement through PWCE. There are currently no financial assets and all rated securities are commensurate with a 'AA-(zaf)' rating. As such, additional PWCE has not been posted.

RATING SENSITIVITIES
Any deterioration in the credit quality of the underlying assets below 'AA-(zaf)', without sufficient PWCE or without the asset being removed, may lead to a downgrade of the CP.

FRB, through its RMB division, acts as liquidity provider, hedge counterparty, credit enhancement provider, sponsor and administrator to the conduit. Consequently, any rating action on FRB's Short-term IDR will be reflected by the rating of iNdwa's CP.

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

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

All of the underlying assets have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant Fitch groups and/or other rating agencies to assess the asset portfolio information.

Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis.
Investor Reports provided by RMB as at 30 June 2015
Rating Agency Reports provided by RMB as at 30 June 2015

REPRESENTATIONS AND WARRANTIES
A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms to those typical for the asset class is available by accessing the appendix that accompanies the initial new issue report (see iNdwa Investments Limited - Appendix, dated 02 July 2003 at www.fitchratings.com). In addition refer to the special report "Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions" dated 26 March 2015 available on the Fitch website.