ICRA retains LA+ (SO) rating to Rs 249 cr CNNL LTD prog

New Delhi, Sep 11 (UNI) Credit rating agency ICRA today retained LA+(SO) rating assigned earlier to the Rs 249 crore long term bond programme of Cauvery Neeravari Nigam Ltd (CNNL), 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 also factors in CNNL'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.

The rating is based on a structured payment mechanism incorporating an unconditional and irrevocable guarantee from the GoK and budgetary provision for the payment of interest and principal over the tenure of the bonds.

CNNL was incorporated in June 2003 by the GoK to finance and implement irrigation projects in the Cauvery basin.

UNI SBA CS KN1743