Mumbai: Indian Railways Finance Corporation (IRFC) has completed India''s first securitisation of sovereign lease receivables of Rs196 crore by way of direct assignment of receivables to a syndicate of banks. Citigroup was the sole structurer and arranger for the securitisation.

The receivables consist of lease amounts payable by the ministry of railways to IRFC. These receivables have been originated under a lease agreement. The transaction has been rated AAA (so) by CRISIL. The receivables have a tenor of 10 years.

Indian Railway Finance Corporation Limited (IRFC) is a wholly owned Public Financial Institution under the ministry of railways and raises finances for meeting the developmental needs of the Indian Railways (IR). IRFC was ranked one among the top ten central public sector undertakings by the department of enterprises, government of India based on its performance during 2001-02 and 2002-03.

Crisil and ICRA have rated IRFC "AAA" and "LAAA" respectively on a standalone basis for its domestic long-term borrowings. In addition, IRFC has long-term foreign currency rating of "BB+" with stable outlook from Standard & Poor''s and "Baa3" rating with stable outlook from Moody''s (in line with India''s sovereign rating from the respective agencies).

S. Balachandran, managing director, IRFC said, "This is a landmark transaction through which IRFC was able to achieve diversification in its funding sources. It attracted considerable interest from investors given that the receivables were of the best quality possible and no cherry picking was required."

Sanjay Nayar, Citigroup country officer, Citigroup India said, "This transaction is another milestone in Citigroup''s efforts towards introducing new structures and new asset classes to the Indian market. It is a matter of great pride for Citigroup to have been chosen as the structurer and arranger by our esteemed customer, IRFC, for its maiden securitisation transaction.."

Citigroup introduced securitisation to the Indian markets by executing the first securitisation deal in 1991 and has maintained a leadership position as an arranger of securitised deals. Till date, it has placed ecuritisation issues aggregating over Rs9,800 crores with a wide range of investors in India. Over the years, Citigroup has introduced new structures to the market like Yield Reserve Floating Rate Securitisation in December 2004, ABS Repackaging deal in September 2004, the first floating rate securitisation issuance and revolving securitisation in India March 2004.