ICRA downgrades rating of BHPV's Rs 15 cr bond prog

New Delhi, Apr 4 (UNI) Credit rating agency ICRA has downgraded the rating assigned to the Rs 15 crore bond programme of Bharat Heavy Plate and Vessels Ltd (BHPV) from LBBB (SO) to LBB (SO) and placed it on the Rating Watch.

The rated instrument carries high credit risk. The original rating was based on an unconditional and irrevocable guarantee by the Governemnt of India and a structured payment mechanism monitored by an independent trustee.

The rating has been downgraded following a default by the company in redeeming the bonds alongwith the interest due as on March 27, 2006. The time-bound structured mechanism stipulated by ICRA required the trustees to invoke the Government of India guarantee in case there was a shortfall in the designated payment account on the specified trigger date.

However, the guarantee has not been invoked as per the terms of the structure.

The revised ICRA rating continues to factor the unconditional guarantee by the Government of India.

UNI SS SR HT1545