Media Coverage / 26 October 2020
The Addendum of EBA SMF Document Is Considered To Provide Protection For Investors
The addendum plan for the Asset Backed Securities (EBA) document belonging to Sarana Multigriya Finansial (SMF) is considered capable of providing protection and a sense of security to investors amid the risk of the Covid-19 pandemic.
Danan Dito, Analyst at Pefindo’s Financial Services Rating Division explained, the purpose of the addendum to the EBA SP document belonging to SMF is to strengthen protection for investors. The steps taken were to provide additional reserves against the risk of worsening the ratio of bad loans or non-performing loans (NPLs) to mortgage loans which are the underlying assets.
“This indeed adds to the protection for investors. It should have been considered (the impact of the addendum) as well, so that it does not interfere with the company’s performance,” Dito told Kontan, Saturday (24/10).
Dito also explained that the SMF addendum is slightly different from the GIAA EBA, considering that the impact of the pandemic on the transportation sector is indeed much heavier. As for KPR loans, one of the supporting factors is the criteria for the first house, so that usually the house is occupied and makes the debtor more motivated to maintain the smooth running of the loan.
“The point is, (investors) always update on the conditions of the instruments they hold, and increase understanding of market conditions and the features of the instruments themselves,” he said.
Reportedly, Sarana Multigriya Finansial (SMF) plans to addendum to transaction documents related to a number of EBA-SPs that they form. This effort was made because the Covid-19 pandemic made the bad credit ratio (NPL) of a number of EBA bills to increase.
This condition can certainly affect the receipt of interest collection results on the interest account and principal collection on the principal account. Responding to these conditions, SMF is reportedly willing to deposit a number of additional funds so that payments to investors will run smoothly, and that requires an addendum.
Sunday, October 25th 2020 / 21:50 WIB