ICRA retains LA+(SO) rating to Rs 1,439 cr KNNL bond prog

New Delhi, Sep 11 (UNI) Credit rating agency ICRA today retained the LA+(SO) rating assigned earlier to the Rs 1,439 crore bond programmes of Karnataka Neeravari Nigam Ltd (KNNL), 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 GoK and budgetary provision for the payment of interest and principal over the tenure of the bonds.

KNNL was incorporated in December 1998 by the GoK to finance and implement all irrigation projects in the Krishna basin, other than those under the Upper Krishna Project.

The aggregate project order book of KNNL was around Rs 13,200 crore, with expenditure yet to be incurred being around Rs 9,200 crore. KNNL had total borrowings of around Rs 1,915 crore outstanding on its books as on March 31, 2006.

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