(The following statement was published by the rating agency.) Fitch Ratings-Singapore / Mumbai-14. January 2021: Fitch Ratings has commissioned Shriram Transport (NS) based in India:
) Finance Company Limited (STFC, BB / Negative) USD 500 million 4.4% Senior Secured Notes due 2024 with a final rating of ‘BB’. This follows the receipt of the final documentation, which corresponds to the information previously received. The final rating corresponds to the expected rating as of January 6, 2021. The Notes are backed by a fixed fee for certain claims equivalent to STFC Domestic Secured Notes and Rupee Senior Secured Notes Overseas. The bonds are also subject to maintenance covenants, according to which STFC must meet the regulatory capital requirements at all times, adhere to a level 3 net asset ratio of no more than 7% and ensure that the security coverage ratio is no more than 1x. The Notes are issued in the international market under the external borrowing of the Reserve Bank of India. Key Rating Drivers STFCs US dollar denominated senior secured bonds are rated at the same level as the long-term standard issuer standard rating (IDR) of “BB” according to Fitch’s rating criteria. Most of STFC’s debt is collateralized, and Fitch believes that failure to pay the company’s senior secured debt would best reflect the company’s unhardened failure. STFC can issue unsecured debt in the overseas market, but these debt are likely to constitute a small portion of its funding and therefore cannot be considered a primary financial obligation. For more information on the company’s key valuation drivers and valuation sensitivities, please see « Fitch Adopts Assessment Actions For Four Indian NBFIs After Pandemic Impact Review » (www.fitchratings.com/site/pr/10134792) posted September 21, 2020. VALUATION SENSITIVITIES The bond’s rating will change in line with STFC’s long-term foreign currency IDR. Best / worst-case assessment scenario The international ratings of financial institutions and covered bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three levels over a three-year rating Horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four levels over three years. The entire spectrum of best and worst case credit ratings for all rating categories ranges from ‘AAA’ to ‘D’. The creditworthiness of the best and worst case scenarios is based on historical performance. Further information on the methodology for determining the industry-specific best and worst-case creditworthiness can be found at [https://www.fitchratings.com/site/re/10111579] Date of the relevant committee September 18, 2020 REFERENCES FOR MAJOR MATERIAL SOURCE AS MAIN EVALUATION DRIVER INDICATED The most important sources of information used for the analysis are described in the applicable criteria. ESG Considerations Unless otherwise noted in this section, the highest ESG credit relevance is 3. This means that ESG issues are credit neutral or have minimal credit impact on the business, either by their nature or the way they are managed by the company. For more information on Fitch’s ESG relevance scores, please visit www.fitchratings.com/esg. Shriram Transport Finance Company Limited —- Senior Secured; Long-term evaluation; New rating; BB Contacts: Primary Rating Analyst Elaine Koh, Director 65 6796 7239 Fitch Ratings Singapore Pte Ltd. One Raffles Quay No. 22-11, South Tower Singapore 048583 Secondary Rating Analyst Siddharth Goel, Deputy Director 91 22 4000 1760 Committee Chair Mark Young, General Manager 44 20 3530 1318 Media Relations: Leslie Tan, Singapore, Tel: 65 6796 7234, E – Mail: [email protected] Bindu Menon, Mumbai, Tel: 91 22 4000 1727, Email: [email protected] Additional information is available at www.fitchratings.com. Additional information Dodd-Frank Rating Information Disclosure Form (https://www.fitchratings.com/site/dodd-frank-disclosure/10149471) Requirement status (https://www.fitchratings.com) / site / pr / 10149471 # Solicitation- Status) Additional information for unsolicited credit ratings (https://www.fitchratings.com/site/pr/10149471#unsolicited-credit-ratings-disclosures) Endorsement status (https: // www .fitchratings.com / site / pr / 10149471 # Endorseme Status) Endorseme nt Policy (https://www.fitchratings.com/site/pr/10149471#endorsement-policy) ALL FITCH CREDIT REVIEWS ARE SUBJECT TO CERTAIN LIMITATIONS AND EXCLUSIONS OF LIABILITY. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS AT THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS (HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS). In addition, the following HTTPS://WWW.FITCHRATINGS.COM/RATING-DEFINITIONS-DOCUMENT (https://www.fitchratings.com/rating-definitions-document) contains details on the evaluation criteria for each evaluation scale and evaluation scale DEFINITIONS IN RELATION TO STANDARD . PUBLISHED REVIEWS, CRITERIA AND METHODS ARE AVAILABLE FROM THIS WEBSITE AT ANY TIME. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, RELATED FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THIS WEBSITE’S CODE OF CONDUCT. DIRECTORS AND SHAREHOLDERS WHO HAVE RELEVANT INTERESTS ARE AFFILIATED THIRD PARTIES AT HTTPS://WWW.FITCHRATINGS.COM/SITE/REGULATORY (https://www.fitchratings.com/site/regulatory). DETAILS OF THIS SERVICE, FOR WHICH THE LEAD ANALYST IS BASED ON AN ESMA OR FCA REGISTERED FITCH RATINGS COMPANY (OR A BRANCH OF SUCH COMPANIES), CAN BE PUBLISHED ON THE ENTITY SUMMARY PAGE ON THE FITCH RATINGS PAGE FOR THIS WEBSITE WILL. Copyright © 2021 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Phone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Complete or partial reproduction or distribution is only permitted with permission. All rights reserved. In submitting and maintaining its ratings and in preparing other reports (including forecast information), Fitch relies on factual information obtained from issuers and subscribers and from other sources that Fitch believes to be credible. Fitch will conduct an appropriate study of the factual information it encounters in accordance with its valuation methodology and obtain appropriate verification of that information from independent sources, where available for a particular security or in a particular jurisdiction. The manner in which Fitch actually investigates and the extent of the verification received from third parties will depend on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold, and / or the The issuer is located, the availability and nature of the relevant public information, access to the management of the issuer and its advisors, the availability of pre-existing third party reviews such as audit reports, agreed procedural letters, expert opinions and actuarial reports, technical reports, legal opinions and others provided by third parties Reports, the availability of independent and competent third party verification sources regarding the particular security or jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s reviews and reports should understand that neither advanced factual investigation nor third party verification can ensure that any information on which Fitch relies in connection with any review or report is accurate and complete. Ultimately, the Issuer and its advisors are responsible for the accuracy of the information they provide to Fitch and the market in offering documents and other reports. In providing its ratings and reports, Fitch must rely on the work of experts, including independent accountants on financial statements and lawyers on legal and tax matters. In addition, ratings and forecasts of financial and other information are inherently forward-looking and contain assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, ratings and forecasts may be influenced by future events or conditions that were not expected at the time a rating or forecast was issued or confirmed, despite a review of current facts. The information in this report is provided « as is » without any representation or warranty of any kind, and Fitch makes no representation or warranty that the report or its contents will meet the requirements of any recipient of the report. A Fitch rating is an opinion on a security’s creditworthiness. This Fitch opinion and reports are based on established criteria and methods, which Fitch continuously evaluates and updates. Therefore, ratings and reports are Fitch’s collective work product and no individual or group of individuals is solely responsible for any rating or report. The rating does not take into account the risk of loss due to risks other than credit risk, unless this risk is specifically mentioned. Fitch is not engaged in the offer or sale of any securities. 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