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Crisil assigns 'AAA' rating for IRFC's Rs 50 billion bonds program

Written by: Staff

Mumbai, May 9 (UNI) India's premier corporate ratings agency, Crisil, has assigned an 'AAA' rating to Indian Railway Finance Corporation's (IRFCs) Rs 50 billion bonds programme.

Crisil has also reaffirmed its 'AAA/Stable' rating to IRFC's Rs 30 billion bonds issue, Rs 29.7 billion bonds issue, Rs 30 billion bonds issue, Rs 30 billion bonds issue and Rs 29 billion bonds issue.

Crisil has further reaffirmed its 'AAA/Stable' ratings to the company's Rs 34 billion and Rs 3 billion borrowing programmes as well as to its Rs 34 billion long-term borrowing programme.

A release issued here today stated that the ratings continue to be based on the support that IRFC receives from the Government of India (GoI) because of its status as the financing arm of Indian Railways, its owner.

The Indian Railways, which is a division of the Ministry of Railways (MoR), is a crucial element of the country's infrastructure and hence, IRFC plays a strategic role in GoI's transport policy, the release stated.

Its ownership by GoI and its favourable lease agreements with the Indian Railways endorse this, stated the release, adding that these lease agreements protect IRFC's net interest margins and shift the interest and forex risks on its borrowings to the Indian Railways.

According to Crisil, IRFC's strong capital adequacy, its consistent profitability, and its ability to raise long-term funds at competitive rates, support the rating strengths.

On IRFC's future outlook, the release stated that given IRFC's strategic role in channeling finance to the Indian Railways, Crisil expects that IRFC will continue to enjoy business support and risk transfer mechanism from GoI. ''These factors will ensure that IRFC will maintain its strong credit profile,'' pointed the release.

In FY 06, IRFC reported an un-audited profit after tax of Rs. 3.35 billion and total income (net of interest expenditure and lease rentals) of Rs. 5.16 billion.


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