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Floods have no impact on car loan repayment: Crisil
Our Bureau
Mumbai
,
Oct. 25
CRISIL, in its analysis of the impact of the recent floods in Maharashtra on the credit quality of Asset Backed Securitisation (ABS) transactions backed by car loan receivables, has concluded that there will be no impact on the outstanding ratings of these transactions.
The unprecedented rain of July 26 damaged many cars and impacted their re-sale value, posing a threat to the performance of ABS pools.
Although the complete impact of the floods can only be gauged over about six months, Crisil has assessed the immediate impact by analysing the collection and delinquency patterns of Crisil-rated car pools; these pools have a principal outstanding of Rs 1,300 crore including about Rs 250 crore in Maharashtra.
The analysis also included discussions with all the major players in the car finance industry for their feedback on collection delays and their strategy for coping with the possible rise in delinquency. Crisil compared the performance of rated pools in July 2005 (a pre-flood collection month) and August (a post-flood collection month).
The analysis reveals no substantial difference in the monthly collection ratio (MCR) in the securitised pools in these payout months.
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