Axis Structured Credit AIF – II

Axis Bank

• Significant presence in corporate lending with loan book of more than Rs. 2,30,738 crore covering large and mid-corporate segments
• Strong eco-system with benefits of close integration among various entities in group
• Ranked No.1 arranger for rupee denominated bonds for 16 consecutive years

Axis Capital

• Axis Capital’s proven expertise in Equity Capital Markets, M&A Advisory & Private Equity is the backbone of successful Structured Finance practice for a decade
• Originated structured debt transactions with Unscathed track record of ‘No Default’ in any transaction for more than 12 years

Axis AMC

• Fixed Income AUM exceeding Rs 89,000 Cr across MM, corporate bond & credit strategies
• A complete range of solutions across equities, fixed income, international equity, multi asset and passive solutions
• Experienced credit research team and dedicated Credit risk fund with strong track record

Axis Finance

• More than 25,000 crore of wholesale loan book
• Large origination team with strong borrower relationship

Experienced credit research team

• Large coverage of more than 250 issuers across sectors
• In-house support from high quality sectorial expertise of equity research team to identify sector specific trends
• Investment in high yielding instruments with tight structuring and rigorous monitoring

Successfully invested and exited in structures (with aggregate amount exceeding Rs. 2000 crore) such as

• Promoter finance backed by strong collaterals and tight covenants
• Securitization
• Multi originator collateralized debt obligation backed by credit enhancements

Risk management is an integral part of credit process

• Consistently maintained high credit ratio (upgrade/downgrade ratio) for the portfolio

The Opportunity

• Asset quality concerns for NBFC’s and regulatory restrictions on MF’s to participate in structured credits has created a vacuum
• Axis Structured Credit AIF-II will target such opportunities to create a granular portfolio of performing credits

Track record

• Axis AMC launched Scheme 1 (Axis Structured Credit AIF-I) in Oct 2021.
• Tracking gross yield of 13%; invested through secured NCD backed by strong collaterals
• Regular distribution as majority exposures are coupon paying
• Launching Scheme 2 (Axis Structured Credit AIF-II) based on similar strategy

Transaction Characteristics

Sector-agnostic approach. Transactions will include

• Secured exposures backed by strong underwriting history of AMC and collateral structuring
• Promotor financing backed by strong covenants and share pledge
• Cash flow-based structures with dedicated and ring-fenced cash pool

Portfolio Mix

• Proposed Portfolio Size: 12–14 transactions
• Target Deal IRR : 13-14%

Origination of transactions

Preliminary discussion with the team

Underwriting

Detailed analysis, discussion with Axis Group and AMC research team

Due Diligence (Legal & Financial)

Portfolio Monitoring

Risk and Compliance reporting

Liquidity/Exit

Well defined framework

Issuer Limits/Sector limits

• Not more than 10% with a single issuer
• Not more than 15% with any group
• Not more than 15% with any sector

Portfolio Mix

• Target mix of 50:50 between HOLDCO/OPCO transactions
• Regular cash flows-based transactions

Rating Mix

• Based on our internal framework
• Majority portfolio in investment grade