Johannesburg, 15 May 2019 — GCR Ratings (“GCR”) has withdrawn the final, public long-term credit ratings accorded to the Secured Class A Notes issued by Mmela Mobility Finance (RF) Ltd (the “Issuer”, the “Transaction”), following the full capital redemption thereof:
● Secured Class A Notes, stock code MMF101; BBB-(ZA)(sf) Rating Watch
The Transaction has outstanding Class B, C and D Notes. The Class D Notes are unrated and held by Mmela Financial Services (Pty) Ltd.
The final, public credit ratings accorded to the Secured Class A Notes relate to timely payment of interest and ultimate payment of principal, whilst the ratings on all other rated securities relate to ultimate payment of interest and ultimate payment of principal. The ratings exclude an assessment of the ability of the Issuer to pay either any (early repayment) penalties or any default interest rate penalties.
Mmela Mobility Finance (RF) Ltd is a R3bn Auto Loan Asset-Backed Note Programme that was approved by the JSE on 7 July 2017. The proceeds of the initial issuance were used to purchase participating assets, being Auto Loan Instalment Sales Agreements (“ISA”) from On-The-Go Vehicle Finance (RF) Ltd (“OTG”), an Approved Seller.
Monthly capital payment towards the Notes continued on a sequential basis of seniority. As such, following the full capital redemption of the Secured Class A Notes on 15 May 2019, the Secured Class B Notes had the total amount of deferred interest (R2,616,262.86) and interest due (R289,956.11) paid on 15 May 2019, along with R2,555,000 of capital redemption.
Following the above capital redemption, the Issuer has R31,178,021 of Secured Class B Notes, R12,325,527 of Secured Class C Notes and R8,000,000 of Secured Class D Notes outstanding, totalling R51,503,548.
GCR has been informed that the Issuer has ISAs with a bookvalue of R57m in its portfolio, and R5.6m of cash in the Account Bank at end April 2019, post the distribution of payments due in terms of the Pre-Enforcement Amortisation Priority of Payments of 15 May 2019. ISAs with credit balances totalling R3.1m have been provided for in cash held in the Account Bank.
GCR will continue to monitor the Transaction. The Transaction is scheduled to be reviewed in June 2019.
NATIONAL SCALE RATINGS HISTORY
|Security class||Stock code||Initial Rating||Long-term Rating||Outlook|
|Secured Class A Notes||MMF101||14 July 2017||AAA(ZA)(sf)||Stable|
|Secured Class B Notes||MMF201||14 July 2017||A-(ZA)(sf)||Stable|
|Secured Class C Notes||MMF301||14 July 2017||BB-(ZA)(sf)||Stable|
|Security class||Stock code||Last Rating||Long-term Rating||Outlook|
|Secured Class A Notes||MMF101||14 December 2018||BBB-(ZA)(sf)||Rating Watch|
|Secured Class B Notes||MMF201||14 December 2018||BB(ZA)(sf)||Rating Watch|
|Secured Class C Notes||MMF301||14 December 2018||B-(ZA)(sf)||Rating Watch|
Senior Structured Finance & Securitisation Analyst
+27 11 784 1771
Sector Head: Structured Finance & Securitisation
+27 11 784 1771
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Global Master Structured Finance Rating Criteria, updated Sep ’18,
Global Consumer Asset Backed Securitisation (ABS) Rating Criteria, updated Sep ’18,
Global Master Criteria for Rating Banks and Other Financial Institutions – Mar ’17,
Mmela Mobility Finance (RF) Limited Surveillance Report – Jan ’19.
RATING LIMITATIONS AND DISCLAIMERS
ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.NET/RATINGS-INFO. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.NET.
SALIENT FEATURES OF ACCORDED RATINGS
GCR affirms that a.) no part of the rating process was influenced by any other business activities of the credit rating agency; b.) the ratings are based solely on the merits of the rated entity, security or financial instrument being rated; c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the ratings is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.
The Arranger participated in the rating process via face-to-face management meetings, teleconferences and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.
The credit rating has been disclosed to the Issuer.
The information received from the Administrator and other reliable third parties to accord the credit ratings included:
- Redemption of Securities letter issued by the JSE, dated 15 May 2019.
The rating above was solicited by, or on behalf of, the rated entity, and therefore, GCR has been compensated for the provision of the rating.
GLOSSARY OF TERMS/ACRONYMS USED IN THIS DOCUMENT AS PER GCR’S STRUCTURED FINANCE GLOSSARY
|Account Bank||A bank where the transaction account is held.|
|Agreement||A negotiated and usually legally enforceable understanding between two or more legally competent parties.|
|Asset||An item with economic value that an entity owns or controls.|
|Capital||The sum of money that is used to generate proceeds.|
|Default||A default occurs when: 1.) The Borrower is unable to repay its debt obligations in full; 2.) A credit-loss event such as charge-off, specific provision or distressed restructuring involving the forgiveness or postponement of obligations; 3.) The borrower is past due more than 90 days on any debt obligations as defined in the transaction documents; 4.) The obligor has filed for bankruptcy or similar protection from creditors.|
|Instalment||Payment made to honour obligations in regards to a credit agreement in the following credited order: 1.) Satisfy the due or unpaid interest charges; 2.) Satisfy the due or unpaid fees or charges; and To reduce the amount of the principal debt.|
|Issuer||The party indebted or the person making repayments for its borrowings.|
|Loan||A sum of money borrowed by a debtor that is expected to be paid back with interest to the creditor. A debt instrument where immovable property is the collateral for the loan. A mortgage gives the lender a right to take possession of the property if the borrower fails to repay the loan. Registration is a prerequisite for the existence of any mortgage loan. A mortgage can be registered over either a corporeal or incorporeal property, even if it does not belong to the mortgagee. Also called a Mortgage bond.|
|Long-Term Rating||A long-term rating reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.|
|Principal||The total amount borrowed or lent, e.g. the face value of a bond, excluding interest.|
|Proceeds||Funds from issuance of debt securities or sale of assets.|
|Rated Securities||Debt securities that have been accorded a credit rating.|
|Rating Watch||Indicates that a rating is under review for possible change in the short term and the movement may be either positive or negative.|
|Redemption||The repurchase of a bond at maturity by the issuer.|
|Repayment||Payment made to honour obligations in regards to a credit agreement in the following credited order: 3.) Satisfy the due or unpaid interest charges; 4.) Satisfy the due or unpaid fees or charges; and 5.) To reduce the amount of the principal debt.|
|Securities||Various instruments used in the capital market to raise funds.|
|Senior||A security that has a higher repayment priority than junior securities.|
|Short-Term Rating||A short-term rating is an opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.|
|Stock Code||A unique code allocated to a publicly listed security.|
|Timely Payment||The principal debt, interest, fees and expenses being repaid promptly in accordance with the contractual obligation.|
|Transaction||A transaction that enables an Issuer to issue debt securities in the capital markets. A debt issuance programme that allows an Issuer the continued and flexible issuance of several types of securities in accordance with the programme terms and conditions.|
|Ultimate Payment||A measure of the principal debt, interest, fees and expenses being repaid over a period of time determined by recoveries.|
For a detailed glossary of terms please click here