Icra downgrades 3 ICICI Bank instruments

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New Delhi, Oct 1 : Rating agency Icra has downgraded ratings for three instruments, which have ICICI Bank’s retail loans as underlying, citing ‘higher than expected’ delinquency levels. “The delinquency level in these pools is more-than-expected, causing utilisation of credit enhancement to be higher than estimated,” Icra said in a statement on Wednesday.

Noting that over the past few months, ICICI Bank has taken various initiatives to strengthen its collection mechanism, Icra, however, said the impact of these initiatives is expected over a period of time. “Based on the weaker performance of these pools till date, the present delinquency level, the expected performance over the balance tenure and the credit enhancement available, Icra has revised the ratings for these transactions,” it added.

The first two transactions comprise commercial vehicle (trucks and buses) loan pools.

The first transaction, with the Issue name Indian Retail ABS Trust Series 58, was executed in June 2006. The rating of this was revised from LAA (SO) to LAA-(SO). In May 2008, in the the rating of this pool, the rating of the senior tranche was revised from LAAA (SO) to LAA (SO). Of the Rs 80 crore, 80% has been amortised and Rs 16 crore is left uncollected.

In the second transaction with the issue name ‘ICICI Bank CV loan pool Direct Assignment Dec-06’ , of the Rs 100 crore, 60% has been amortised and Rs 40 crore is left uncollected. In the third transaction with the issue name ‘Indian Retail ABS Trust Series 93’, of the total Rs 790 crore, the affected tranche is worth Rs 130 crore and the collection was weaker than expected.

“This is not the first time that pools of ICICI Bank has been downgraded,” Kalpesh Gada, Head, Structured Finance Products, ICRA, said. He, however, added that there was no big danger. “Had there been a clear portfolio issue, then all the pools could have got affected.”