(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Platinum Trust - February 2014 Tranche II http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=738235 HONG KONG, February 26 (Fitch) Fitch Ratings has assigned an expected rating to Platinum Trust February 2014 Tranche II's pass-through certificates (PTC) as follows: INR506.9m Series A PTC due January 2019: 'BBB- (EXP)sf'; Stable Outlook The rating addresses timely payment of interest and principal in accordance with the payout schedule in the transaction document, which will be subject to changes such as the netting of the distribution tax on the income distributed by the trust to the PTC holders. The final ratings are contingent upon the receipt of final documents conforming to information already received. The transaction is a static securitisation of Indian rupee-denominated commercial vehicle loans originated by Cholamandalam Investment and Finance Company Limited (CIFCL), which is also the servicer. KEY RATING DRIVERS The rating and outlook reflect adequate external credit enhancement (CE) of 10.5% of the initial principal balance, CIFCL's origination practices, servicing experience, and expertise in collection and recovery of commercial-vehicle loans in India. The transaction is supported by a sound legal and financial structure. The CE will be in the form of cash collateral/fixed deposits with a bank rated at least 'BBB-' and 'F3' by Fitch in the name of the originator with a lien marked in favour of the trustee. The credit enhancement is deemed sufficient to cover the commingling risks of the servicer and the liquidity for the timely payment of PTCs. India's economic uncertainty has been factored into the analysis. The 2012 vintage showed more delinquencies at over 90 days past due than in earlier vintages as a result of unfavorable economic conditions in 2013. Based on Fitch's projections, the 2013 vintage also shows signs that performance has deteriorated. This was the result of unfavorable economic conditions during 2013. The agency has considered the heightened economic risks in India in its default-rate assumption. The default rate, recovery rate and time to recovery, together with the portfolio's weighted-average yield, were stressed in Fitch's APAC ABS cash flow model to assess the sufficiency of cash flow for timely payment at the current rating level. No interest-rate or foreign-currency risks exist in the transaction, since both the assets and the PTCs are fixed-rate and denominated in rupees. The transaction comprises a seasoned portfolio with less granular pool than the pools securitized in the past. The collateral pool will be assigned to the trust at par and as of the cut-off date of 31 January 2014, had an aggregate outstanding principal balance of INR506.9m and consisted of 1,905 loans. The collateral pool has a weighted average (WA) loan-to-value ratio of 81.23%, a WA seasoning of 16 months and a WA yield of 15.84%. The pool features some degree of diversification by asset type, with loans for light commercial-utility vehicles (LCV) accounting for 59.8% of the total pool, Mini LCV 16.8%, multiple-use vehicle 11.4%, tractors 10.6%, and heavy-utility vehicles 1.4%. The portfolio is also geographically diversified, and exposed to a total of 17 Indian states in terms of obligor composition. RATING SENSITIVITIES Based on Fitch's sensitivity analysis, the base-case default rate would need to increase by at least 24% from the current rate, or the base-case recovery rate to decline by at least by 33%, before a rating downgrade to 'BB+' would be considered. The sensitivity analysis assumes that the CE and other factors remain constant. However, the rating could be upgraded if the rating of the bank holding the cash collateral deposits is upgraded to above 'BBB-' and the portfolio performance remains sound, with adequate CE that can withstand stress at above a 'BBB-sf' rating scenario. At closing, CIFCL will assign commercial vehicles loans to Platinum Trust - February 2014 Tranche II which in turn will issue the PTCs. The PTC proceeds will be used to fund the purchase of the underlying loans. Available on www.fitchratings.com or by clicking on the above link is a report entitled "Platinum Trust - February 2014 Tranche II Representations & Warranties Appendix", which includes a description of the representations, warranties, and enforcement mechanisms within the transaction. Contacts: Primary Analyst April Chen Director +852 2263 9936 Fitch (Hong Kong) Limited 2801, Tower Two, Lippo Centre 89 Queensway Hong Kong Secondary Analyst Keum Hee Oh Director +82 2 3278 8373 Committee Chairperson Helen Wong Director +852 2263 9934 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: [email protected]. Additional information is available on www.fitchratings.com. The source of information used to assess the rating was CIFCL as the originator and servicer. The information provided by the originator to support Fitch's asset analysis included CIFCL's static and dynamic portfolio data from April 2004 to December 2013 and the securitised pool loan-by-loan data as of 31 January 2014. The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public. Applicable criteria 'APAC Consumer ABS Rating Criteria', dated 24 July 2013, 'Global Structured Finance Rating Criteria', dated 24 May 2013, 'Counterparty Criteria for Structured Finance and Covered Bonds', dated 13 May 2013, and 'Criteria for Rating Securitisations in Emerging Markets', dated 27 Jun 2013, are available at www.fitchratings.com. Applicable Criteria and Related Research: APAC Consumer ABS Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711196 Global Structured Finance Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661 Counterparty Criteria for Structured Finance and Covered Bonds http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155 Criteria for Rating Securitizations in Emerging Markets http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711605 Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=821737 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.