HDFC Bank to Close a Major Loan Transaction

19 Sep 2024 , 03:47 PM

HDFC Bank, India’s largest private lender, hopes to execute its largest loan sale to date, valued more than Rs 90 billion ($1.08 billion), by the end of September, according to a report by Reuters.

In July 2023, HDFC Bank amalgamated with its parent Housing Development Finance Corp, bringing a large pool of mortgage loans to the bank’s portfolio but significantly reducing deposits. This has put it under pressure to either accelerate deposit growth or reduce loan growth.

The bank is in the process of issuing pass-through certificates secured by a pool of car loans.

India Ratings has awarded these securities a preliminary AAA(SO) rating, and the collateral pool has an outstanding balance of 90.62 billion rupees as of August 31.

The provisional ratings are based on HDFC Bank’s origination, servicing, collection, and recovery capabilities, the rating agency stated.

The pass-through certificates will mature in three parts: September 2026, July 2027, and September 2030, with debts totalling 35 billion rupees, 18 billion rupees, and 37.62 billion rupees, respectively.

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