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ICICI Launches India's First CDO Fund

March 07, 2002

ICICI Ltd. today announced the launch of India's first multi-tranched Collateralised Debt Obligation named Indian Corporate Collateralised Debt Obligation Fund ("ICCDO Fund"). The Rs. 506 crore transaction structured by ICICI is a close-ended passive debt scheme under the ICICI Securities Fund, a mutual fund registered with SEBI. The Scheme offers both Growth and Income options to investors and will open on March 8, 2002. The units are proposed to be listed at the BSE and NSE and will be available in dematerialized mode.


The ICCDO Fund has three tranches. The Class A units aggregating about Rs. 376 crore being offered for investment are rated LAAA(SO) by ICRA. The Class B units aggregating about Rs. 59 crore are rated LA+(SO) by ICRA and would be subscribed by the International Finance Corporation, Washington subject to regulatory approvals. The Class C units aggregating Rs. 71 crore would be subscribed to by ICICI (representing an Equity interest, as is common in such structures). Both Class B and Class C units are subordinate to Class A units and Class C is subordinate to Class B.


Under the Scheme, each unit will have a face value of Rs. 50 lacs with a minimum investment of Rs. 5 crore. The Class A units will be offered to institutional investors including banks, financial institutions, trusts and mutual funds through the book-building process which will determine the rate of return on these units.


The ICCDO Fund, offers the Indian investors an alternative fixed income product, structured to give a relatively higher return to a comparably rated plain vanilla corporate bond. The current scheme offers investors an opportunity to lock in on a diversified portfolio of debentures and loans of 24 companies from various sectors with existing track record of repayment and average residual maturity of about 2 years. The investors in Class A units will also have the advantage of credit enhancement provided by the additional cash flow support from Class B and Class C units.


Except for the historical information contained herein, statements in this release which contain words or phrases such as "will", "would", "aim", "will likely result", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", "seek to", "future", "objective", "goal", "project", "should", "will pursue" and similar expressions or variations of such expressions may constitute "forward-looking statements". These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, future levels of non-performing loans, our growth and expansion, the adequacy of our allowance for credit losses, technological changes, investment income, cash flow projections, our exposure to market risks, demand for various products and services offered by ICICI, as well as other risks detailed in the reports filed by ICICI Limited with the Securities and Exchange Commission of the United States. ICICI undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.


For further press queries please contact:
ICICI: Mr Charudatta Deshpande
Head Corporate Communications,
Tel: 022-26538208
Fax: 022 26531116