MUMBAI, February 12: Gas Authority of India Ltd (GAIL), Indian Railway Finance Corporation (IRFC) and National Capital Region Planning Board (NCRPB) plan to raise Rs 885 crore from the debt market through the issue of five-seven year bonds. The coupon rates on these instruments have not yet been finalised.All the three debt floats have been assigned triple-A (SO) ratings by the Credit Rating Information Services of India Ltd (Crisil). The ratings indicate that the degree of safety regarding timely payment of interest and principal on the instrument is the highest. While GAIL plans to raise Rs 500 crore, IRFC and NCRPB will raise Rs 300 crore and Rs 85 crore respectively. IRFC will use the proceeds of the issue to part-finance the requirement of funds by the railways ministry for acquiring rolling stock as part of the modernisation and expansion of the Indian railways. The railways ministry has issued a letter of comfort, undertaking to make funds available to IRFC in advance, if required to ensure thetimely repayment of principal on IRFC's debt obligations.
NCRPB proposes to deploy the proceeds of the bond issue towards capacity creation in the urban infrastructure sector for the national capital region. The ministry of urban affairs and employment has issued a letter of comfort for timely servicing of financial obligations on the rated instrument. Crisil has also reaffirmed the triple-A (SO) ratings assigned to eight bond programmes of GAIL amounting to over Rs 4,000 crore. The rating agency has also reaffirmed the triple-A (SO) rating assigned to the Rs 80-crore debenture programme of GE Capital Services India. Meanwhile, the premier rating agency has upgraded the Rs 430-crore bond programme of Coal India Ltd to AA- from A+. It has also reaffirmed the P1+ rating assigned to Coal India's short-term debenture programme.
The assigned ratings reflect Crisil's comfort on Coal India's near monopoly position in the critical coal sector, the favourable demand-supply position in the coal industry and thecompany's established infrastructure and linkages with a majority of users. However, the rating is tempered by Crisil's concerns on the company's operating efficiencies, high receivables position and the moderate financial profile. The Crisil rating also factors in Coal India's ownership by the government of India. The rating agency has assigned FAAA ratings to fixed deposit (FD) programmes of EIH Ltd and Tata Tea Ltd. The ratings indicate highest degree of safety regarding timely payment of interest and principal on the instrument.
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