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...`BB+' rating for loan from S&P
Our Banking Bureau
Mumbai : The Rs 400-crore student loan programme fashioned by Citibank, IFC and NIIT has received a `BB+' rating from Standard & Poor's indicating a positive and stable outlook. Any losses incurred during the life of the programme will be allocated first to a junior risk retained by Citibank, for up to 11 per cent of the maximum portfolio amount. Citibank has a risk reimbursement for this with NIIT. After the junior risk class is exhausted, IFC provides a mezzanine guarantee to Citibank for upto 10 per cent of the maximum portfolio.In other words, out of a sum of Rs 100, Citibank will bear the risk for Rs 11 for which it will receive risk compensation from NIIT while IFC will bear the risk for Rs 11 to Rs 21. Citibank will bear the rest of the risk, which will also decide the eligibility for the programme on the basis of a minimum scholastic score of 60 per cent in the NIIT entry test and a positive result in the Citibank personal interview. Citibank is looking at business volumes between Rs 60 and Rs 100 crore this year which would eventually culminate into Rs 400 crore. Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
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