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Updated on: Monday, March 30, 2020, 12:04 PM IST

Lockdown to hit Indian CV, SME loan securitization: Moody's

Moody's Investors Service on Monday said that India's nationwide lockdown is expected to impact securitisation with commercial vehicle and small and medium enterprises loans as the underlying assets.
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In a note on Monday, the rating agency said that the lockdown and broader fallout from the coronavirus' spread in India and globally will significantly slow economic activity. As non-essential freight is halted, it may impact their earnings and ability to repay loans. About 40-60% of loans in Indian auto asset-backed securities are collected in person and the lockdown disrupt collections, it said. While cash collateral is sufficient to cover investor payouts over the next few months, it could change in the event of a prolonged disruption in loan collections. On Friday, the Reserve Bank of India gave a three-month moratorium on repayment of all term loans.

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Published on: Monday, March 30, 2020, 12:02 PM IST
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