ICRA assigns LA+(SO) to Rs 200 cr bond prog of KSIIDC

New Delhi, Sep 11 (UNI) Credit rating agency ICRA today retained LA+(SO) rating assigned earlier to the Rs 200 crore bond programmes of Karnataka State Industrial Investment Development Corporation (KSIIDC), indicating adequate safety.

The rating takes into account the improvement in Karnataka government's (GoK) finances over the last few years supported by buoyancy in own revenues and the state's continued emphasis on fiscal discipline.

The rating is based on structured payment mechanisms incorporating unconditional and irrevocable guarantees from the GoK.

The guarantees are however not supported by budgetary provisions.

The rating also factors in KSIIDC's limited ability to independently service the rated obligation through its own cash flows and derives comfort from the structured payment mechanism designed to ensure timely repayment of obligations against the rated bonds.

GoK established KSIIDC in 1964 for planned development of infrastructure and industries in the state, through provision of financial assistance to medium and small-scale units.

Its lending and investment activity in FY06 remained at near standstill; aggregate sanctions during this period were Rs 7 crore and disbursements around Rs 18.9 crore.

UNI SBA CS KN1739