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CHENNAI, March 7

ASHOK Leyland Finance has securitised receivables worth Rs 104 crore — the largest single securitisation deal ever in the country.

With this, the company has raised Rs 550 crore this year through securitisation deals. "We'll do another Rs 100 crore before the end of the year," Mr N. Sampath Kumar, Executive Director - Finance, ALF, told Business Line on Thursday.

Of the Rs 650-crore securitisation that the company expects to do this year, Rs 400 crore would be without recourse, he said.

Under this deal, some of ALF's receivables were placed with a SPV called Peoples Financial Services Ltd, a subsidiary of Citicorp India. The SPV then issued `pass through certificates' (PTCs) — or bonds, to investors who bought the portfolio. In all, 105 PTCs were issued for the deal, which were picked up by mutual funds, banks and financial institutions.

ALF is also the collection and payments agent, which means that it is the company's responsibility to collect monies from its borrowers, and pay the investors. But the risk of bad debt is borne by the investors, because the deal is "without recourse".

The Managing Director, Mr S. Nagarajan, said though the company had raised around Rs 3,500 crore through securitisation deals in the last five years, it was only of late that the transactions were being done through `pass through certificates'. One of the major advantages of securitisation is that the loans securitised go off the balance sheet. This reduces pressure on capital adequacy and enables a company to operate on a thinner capital base.

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