Agri Harvest Investments (RF) Limited Transaction 1 (Jul 2022)
The Transaction is an asset-backed securitisation of agricultural loans that are advanced to commercial farmers in South Africa and forms part of a multi-issuer programme arranged by RMB. For this first transaction, the agricultural loans sold to the Issuer are originated by GWK, which operates as a primary and secondary agriculture financier.
The proceeds of the first tranche of Notes Issued have been used to purchase a portion of the proposed Initial Asset Pool. On the completion of the staged purchase of the Initial Pool of Participating Assets, the Transaction will continue as a revolving transaction and will amortise in the event that an unremedied Stop Purchase Trigger breach occurs.
To accord ratings, the cashflows are modelled as per the Pre-Enforcement Priority of Payments applicable in the Amortisation Period as per GCR’s Criteria for Rating Structured Finance Transactions. Interest and principal on all the Notes issued is to be paid quarterly on each Payment Date during the Revolving Period and Amortisation Period.
The Issuer will appoint GWK as its agent to fulfil the Servicer role and FirstRand Bank (“FRB”) to fulfil the Administrator role. RMB (a division of FRB) will be appointed in multiple roles including Account Bank and this appointment will be subject to it maintaining the Required Credit Rating.
The loans purchased by the Issuer are backed by many forms of security, including crop cessions, notarial bonds, suretyships and mortgage bonds. GCR was provided with historical default and recovery vintage data from July 2016 to January 2022 and used the data to formulate base case assumptions for defaults and recoveries.