ICRA has assigned a conditional 'AAA(SO)' rating to PTC's backed by a Rs 387.02 crore (principal outstanding) Commercial Vehicle (CV) loan receivables originated by Cholamandalam Investment & Finance company (CIFCL). The conditional rating is based on the strength of cash flows from the selected pool of contracts, CIFCL's track record in the CV loan business, the available credit enhancement in the form of cash collateral and subordination of Excess Interest Spread (EIS), and the integrity of the legal structure. 

According to the transaction structure, the loan pool receivables will be transferred 'at par' to a Special Purpose Vehicle (SPV) and the Trust will issue a single series of PTCs, backed by the same. The first line of support for meeting any shortfall in meeting the scheduled PTC Payouts is the subordination of EIS in the structure. Further credit support in the transaction is available through a Cash Collateral (CC) of 9.00% of the pool principal.

CIFCL is an Asset Finance Company (AFC) based out of Chennai and part of Murugappa group of companies. Incorporated in 1978, CIFCL initially had a strong presence in Southern region but has subsequently widened its base to Northern and Western regions.