Commentary & Deal Flow

India Vehicle Finance, an offshore SPV incorporated in Mauritius and registered as an FPI with SEBI in India, US$ benchmark 144A/Reg S (Cat 1) Senior Secured Notes. Expected Issue Ratings BBB- (sf) by Fitch. Global Coordinator: Barclays Bank PLC (B&D). Joint Lead Managers & Joint Bookrunners: BNP PARIBAS, DBS Bank Ltd, Deutsche Bank, HSBC, J.P. Morgan, Standard Chartered. Maturity 6.5 years; expected maturity of 5 years with a weighted average life of ~3.5 years based on MCS. Maturity Date 25-Sep-30. Expected Principal Repayment Months 12M 18M 24M 30M c. 36.5M 42M 48M 54M 60M. MCS % 6% 6% 6% 6% 12.50% 12.50% 12.50% 12.50% 26%. UOP: To subscribe to: (i) 95% of INR Senior Pass Through Certificates (PTCs) issued by Sansar Vehicle Finance Trust Dec 2022 (“SVFT”) and (ii) For transaction related fees and expenses including capitalization of Issuer. Listing: SGX. Governing Law: English Law. The Mauritius security documents and Account Bank Agreement will be governed by Mauritius Law. Pricing 3/18.  Settle 3/24. Initial Coupon Guidance: 6.15% area.

Security: Pledge over 100% shares of the Issuer; Charge over all assets of the Issuer (other than Indian assets including INR Senior PTCs and Manager Indemnity Assets in line with SEBI and FEMA guidelines)

Hedging: INR Coupon and Principal will be fully hedged through cancellable cross currency swap transactions

Denominations: US$250,000 and integral multiples of US$1,000 in excess thereof

Key Terms of INR PTCs:
Seller: Shriram Finance Limited
Servicer: Shriram Finance Limited
Instrument: Unlisted INR Pass Through Certificates (“PTC”)
Use of Proceeds (i.e., subscription amounts from the PTCs): To be utilised towards payment of purchase consideration to the Seller for purchasing a pool of commercial vehicle and construction equipment loans (originated by the Seller) which meets the Selection criteria (“Initial Identified Receivables”), which purchase consideration may be used by the Seller in accordance with the Seller’s Social Finance Framework.
Final Maturity: 6.5 years; expected maturity of 5 years with a weighted average life of ~3.5 years based on MCS.
Principal Payment: As per the MCS Payment Schedule, subject to cash flows from Identified Receivables and waterfall; Upon a trigger event, principal dues will be mandatorily redeemed on a quarterly basis subject to collections, cashflow waterfall and RBI VRR guidelines.
MCS Payment Schedule: 12M (6%), 18M (6%), 24M (6%), 30M (6%), c. 36.5M (12.5%), 42M (12.5%), 48M (12.5%), 54M (12.5%), 60M (26%)
Credit Enhancement: (1) 13.75% Equity PTCs subscribed by Seller; (2) Static cash collateral equal to 5% of opening principal amount of Senior PTCs; (3) Opening Overdues (if any) and Realized EIS Asset Cover: Min. 1.1375 at all times until Senior PTCs are outstanding.
Replenishment Period: Earlier of (i) 54 months from the allotment of PTCs and (ii) occurrence of Trigger Event.
Trigger Event: Linked to non-payment of yield, non-maintenance of Asset Cover etc.
Trigger Event Consequences: Replenishment gets terminated, collections to be deposited on a daily basis, sale of Identified Receivables etc.