Indian Railways Finance Corporation (IRFC) has completed India''s first securitisation
of sovereign lease receivables of Rs196 crore by way of direct assignment
of receivables to a syndicate of banks. Citigroup was the sole structurer
and arranger for the securitisation.
receivables consist of lease amounts payable by the ministry of railways to
IRFC. These receivables have been originated under a lease agreement. The
transaction has been rated AAA (so) by CRISIL. The receivables have a tenor
of 10 years.
Railway Finance Corporation Limited (IRFC) is a wholly owned Public Financial
Institution under the ministry of railways and raises finances for meeting
the developmental needs of the Indian Railways (IR). IRFC was ranked one among
the top ten central public sector undertakings by the department of enterprises,
government of India based on its performance during 2001-02 and 2002-03.
and ICRA have rated IRFC "AAA" and "LAAA" respectively
on a standalone basis for its domestic long-term borrowings. In addition,
IRFC has long-term foreign currency rating of "BB+" with stable
outlook from Standard & Poor''s and "Baa3" rating with stable
outlook from Moody''s (in line with India''s sovereign rating from the respective
Balachandran, managing director, IRFC said, "This is a landmark transaction
through which IRFC was able to achieve diversification in its funding sources.
It attracted considerable interest from investors given that the receivables
were of the best quality possible and no cherry picking was required."
Nayar, Citigroup country officer, Citigroup India said, "This transaction
is another milestone in Citigroup''s efforts towards introducing new structures
and new asset classes to the Indian market. It is a matter of great pride
for Citigroup to have been chosen as the structurer and arranger by our esteemed
customer, IRFC, for its maiden securitisation transaction.."
introduced securitisation to the Indian markets by executing the first securitisation
deal in 1991 and has maintained a leadership position as an arranger of securitised
deals. Till date, it has placed ecuritisation issues aggregating over Rs9,800
crores with a wide range of investors in India. Over the years, Citigroup
has introduced new structures to the market like Yield Reserve Floating Rate
Securitisation in December 2004, ABS Repackaging deal in September 2004, the
first floating rate securitisation issuance and revolving securitisation in
India March 2004.