An analysis of Commercial Vehicle (CV) pools originating in CY2013 and CY2014 pools by ICRA has revealed that their performance has been relatively weak initially compared to those that originated in CY2012 and CY2011 at similar points post securitisation. A gradual reduction in delinquencies has been observed around 21 months post securitisation in pools originating in CY2013. Due to the relatively weaker performance of CY2013-CY15 pools, credit enhancement utilisation for these pools has been increasing; cash collateral utilisation however remains low as other forms of credit enhancement like subordination and excess interest spread have been sufficient to meet collection shortfall. The break even collection efficiency for the pools is low for most transactions. “The performance of loans issued in states like Haryana, Jharkhand and Puducherry look weaker”, said Kalpesh Gada, Head- Structured Finance, ICRA. He added, “In the case of pools backed by small business loan contracts, at a median level, the delinquencies are low compared to those observed for CVs. Though delinquencies increased in the previous fiscal (FY2015) some recoveries are evident in this fiscal (FY2016).”

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