Floating Rate ABS transaction of KMFL

ProductAsset Backed Securitisation (ABS)
ValueRs. 1.81 bn
RatingAAA (SO)
TimingJune 2002 & August 2002
Kotak MahindraAdvisor & Sole Arranger

Achieved Benchmark Pricing through Book Building

  • In the second tranche mobilised RS 1.05 bn with terminal maturity of 34 months at a benchmark yield of 8.19%
  • Achieved a fine spread of 125 bps over similar maturity AAA manufacturing companies
  • Prior to this issue, similar AAA (SO) rated paper were priced at 160-200 BPS over similar maturity AAA manufacturing companies First time structured an option of Floating Rate Pass Through Certificates in a ABS transaction
  • Structured an option of Floating Rate PTCs for the investors
  • The discount rate on the PTCs was linked to "Average of the Reuters Benchmark rate for 1 year Government of India Securities (1 year annualised INBMK) with a cap and floor on the discount rate
  • Discount rate to be reset every month