ICRA has assigned a conditional rating of A1(SO) to the Pass-Through Certificates (PTC) issued under the loan securitisation programme originated by GE Capital Services India (GECSI). The PTCs are backed by receivables from a loan given to NPIL Holdings Private Limited (NPILHPL). The rating A1 is the highest-credit-quality rating assigned by ICRA to short-term debt instruments. Instruments rated in this category carry the lowest credit risk in the short term. Within this category, certain instruments are assigned the rating of A1+ to reflect their relatively stronger credit quality. The letters SO in parenthesis suffixed to a rating symbol stand for Structured Obligation. An SO rating is specific to the rated issue, its terms, and its structure. SO ratings do not represent ICRA's opinion on the general credit quality of the issuers concerned. The rating for the PTCs is conditional on fulfilment of all conditions under the structure, vetting of documentation and obtaining of an independent legal opinion on the transaction. The rating is based on the financial flexibility of NPILHPL and its group companies, Swastik Safe Deposit & Investment Limited (Swastik) and Savoy Finance & Investment Private Limited (Savoy), by virtue of their investments in PHL shares, the triggers designed to ensure adequate collateral cover and the integrity of the legal structure. The rating also factors the risk associated with a potential decline in market value of the promoter companies' holdings.

As per the structure, GE Capital Services India (GECSI) will assign to the Trust all the outstanding receivables arising out of the identified loan together with security interest to NPILHPL, with principal of Rs. 450 million. The Trustee will issue a single series of PTCs representing undivided beneficial interest in the loan receivables. The underlying loan is secured by shares of PHL such that their market value is 2.5 times the debt outstanding. The Obligor, together with Group Companies (Swastik and Savoy), have undertaken to restrict their combined debt and to not reduce their existing 41% holding in PHL during the tenure of the underlying loan.

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