ICRA assigns LA+(SO) to Rs 350 cr LTD prog of KBJNL
New Delhi, Sep 11 (UNI) Credit rating agency ICRA today retained the LA+(SO) rating assigned earlier to the Rs 350 crore long term bond programme of Krishna Bhagya Jala Nigam Ltd (KBJNL), 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 a structured payment mechanism incorporating an unconditional and irrevocable guarantee from GoK and budgetary provision for the payment of interest and principal over the tenure of the bonds.
The rating also factors in KBJNL'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.
KBJNL was incorporated by GoK to implement the Upper Krishna Project (UKP) for creating irrigation potential over an area of around 616 thousand hectare in Karnataka.
Apart from the UKP, KBJNL has some other small projects entrusted to it resulting in a total order book of Rs 10373 crore.
UNI SBA CS KN1737