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Credit rating downgrade of Mmela Mobility Finance (RF) Limited notes - MMF101 | MMF201 | MMF301
MMELA MOBILITY FINANCE (RF) LIMITED
("the Issuer" or "the Company")
(Registration Number: 2015/231615/06)
Stock Codes: MMF101, MMF201 and MMF 301
Date: 20 July 2018
CREDIT RATING DOWNGRADE OF MMELA MOBILITY FINANCE (RF) LIMITED NOTES
Authorised Programme size R 3,000,000,000
Total notes issued R 284,999,997
On July 18, 2018, Global Credit Ratings (“GCR”) downgraded the final, public long-term credit
ratings of the following Notes issued by Mmela Mobility Finance (RF) Limited (“the Issuer”;
”the Transaction”):
Stock Code Class Nominal Outstanding Rating from: Rating to:
MMF101 A R230,941,450.03 AAA(ZA)(sf) BBB-(ZA)(sf)
MMF201 B R33,733,021.00 A-(ZA)(sf) BB(ZA)(sf)
MMF301 C R12,325,526.11 BB-(ZA)(sf) B-(ZA)(sf)
The Transaction has Class D Notes of R8,000,000 that are unrated and held by Mmela
Financial Services (Pty) Ltd.
The rating action was based on the following reasons provided by GCR, namely:
1. In light of recent information shared with GCR, it has become apparent that should MFS
no longer be in existence, the absence of a fluid transition to a back-up servicer may cause
a disruption in the cash flows. In this regard, elevated transition risk stems from the period
wherein CSS would fully take over its role as primary servicer, which necessitates, amongst
others, to obtain the relevant authorisations to access the Q-Link system (which allows
the payroll deduction of the instalments owed by the borrowers). This increases the
exposure of the Noteholders to operational and financial risks linked to MFS.
2. The non-adherence by certain parties to the Transaction documentation initially reviewed
by GCR. GCR is of the view that this may create uncertainty for the future performance
of the transaction.
3. The transition phase between the servicers caused the sharing of Servicing responsibilities
on a piecemeal basis, which is deemed sub-optimal for the Transaction
4. The late execution on NPLs curtailed collections.
For further details of the rating action taken on the Notes issued on Mmela Mobility Finance
(RF) Limited please refer to GCR’s website for the press release.
https://globalratings.net/news/article/mmela-mobility-finance-rf-limited-ratings-
downgraded-rating-watch-maintaine
The Issuer, the current Servicer (being CSS Credit Solutions Services Proprietary Limited) and
Redinkcapital Proprietary Limited (collectively “the Parties”) were requested to comment on
a first draft of the press release, which they did, with various factual inaccuracies brought to
the attention of GCR. The Parties would like it noted that they did not have sight of the final
draft prior to the release, nor were aware of its release by GCR. Follow up communication
will be released by the Issuer setting out the Parties response to GCR report referred herein.
Redinkcapital Proprietary Limited
Debt Sponsor
20 July 2018
Date: 20/07/2018 08:31:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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