Omicron threat can severely affect loan securitisation as asset quality concerns grow
Zee News
If the worry around the Omicron variant grows, the unsecured loan financiers would be worst affected in the securitisation market.
New Delhi: The looming threat of Omicron variant can "severely affect '' loan securitisation volumes in the country as concerns over retail asset quality reemerge, a domsetic credit rating agency said on Monday.
The new variant of the novel coronoavirus, which has already been reported from a few Indian states, can lead to the volumes of securitisation, where the originator of a loan typically passes on future receivables to another entity for a discount against upfront cash, going down from what was initially estimated.
The threat of the newly discovered Omicron variant of Covid-19 may once again make investors cautious when purchasing retail pools originated by non-banking financial companies (NBFCs) and housing finance companies (HFCs) through direct assignments and securitisation transactions, Icra said in a report.
