Rpt fitch rates indian railway finance corps proposed notes bbb (exp)

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(Repeat for additional subscribers)Jan 13 (The following statement was released by the rating agency)Fitch Ratings has assigned Indian Railway Finance Corporation's (IRFC) proposed US dollar notes an expected rating of 'BBB-(EXP)'. The rating is aligned with IRFC's Long-Term Issuer Default Rating (IDR) of 'BBB-', which has a Stable Outlook. The final rating on the notes issue is contingent upon the receipt of final documents conforming to information already received. KEY RATING DRIVERS IRFC's ratings reflect the entity's public sector status, government ownership and strong operational and strategic ties with the government of India, resulting in a strong likelihood of extraordinary government support if needed.

As such, IRFC has been classified as a dependent public sector entity under Fitch's criteria and the ratings are credit linked to that of the sovereign. The ratings derive strength from the Ministry of Railways' ongoing support as evidenced by regular equity injections into IRFC since its formation. IRFC's debt/equity ratio has been close to the regulatory 10x limit in the past three years. Fitch expects further capital injections from the Ministry of Railways if this ratio were to exceed the limit. The ministry injected INR7.5bn and INR6bn in FY12 and FY13, respectively. IRFC is the sole financing arm of the Ministry of Railways and is mainly involved in providing finance leases to rolling stocks including locomotives, passenger coaches, and freight wagons among others. Fitch expects IRFC's collaboration with the government to persist.

IRFC is wholly owned by the government and the board of directors is appointed by the government. The Ministry of Railways signs a memorandum of understanding with IRFC every year to set its operational and financial performance targets, which it reviews on a quarterly basis. The Comptroller and Auditor General of India appoint IRFC's auditors on an annual basis, enhancing government control. It has been agreed with IRFC that the Ministry of Railways will cover any shortfall, by making advance payments of lease rentals, if IRFC does not have sufficient resources to redeem maturing bonds and/or repay loans. Fitch expects future standard lease agreements to continue to contain a similar assurance and the ministry to provide funding to prevent liquidity mismatches that may lead to an IRFC default. IRFC's profitability is resilient and highly visible because its interest income is charged on a cost mark-up basis and the capital investment pipeline of the Indian railway sector is strong. Its assets and liabilities are closely matched. With a sound reputation in capital market, Fitch expects IRFC to be able to easily access domestic capital markets and banks for low-cost long-term funding.

RATING SENSITIVITIES A positive rating action would stem from a similar change in the ratings of the Indian sovereign in conjunction with continued strong support from the government. Significant changes to its strategic importance and financing arm status to the Ministry of Railways or a dilution in the government's shareholding to less than 51% could result in the entity no longer being classified as a dependent public sector entity and therefore no longer being credit- linked to the sovereign rating. IRFC was incorporated to raise funds from debt capital markets to finance the acquisition of new rolling stock to meet the developmental needs of the Indian railway system administered by the Ministry of Railways. Established in 1986, IRFC is registered as a notified public financial institution under the Companies Act, 1956 and as a non-banking finance company and asset finance company under the Reserve Bank of India (RBI) Act, 1934. var $relatedItems = $('lia "/article/global-markets-idUSL5N1EU2HP"GLOBAL MARKETS-Accelerating economic activity, inflation sustain investors\' festive fizz/a/lilia "/article/eurozone-bonds-idUSL5N1EU1X1"UPDATE 1-Euro zone yields fall as investors look beyond headline inflation/a/li'), $relatedItems = $relatedItems.slice(0,10), relatedBlockLimit = Number('6'), relatedItemsTotal = $relatedItems.length, $paragraphTags = $('#article-text p'), contentParagraphs = 0, minParagraphs = Number("8"); for (i=0; i $paragraphTags.length; i++) { if ($paragraphTags[i].innerText.trim().length 0) { contentParagraphs = contentParagraphs + 1; } } if (contentParagraphs minParagraphs) { setTimeout(function(){ if (relatedItemsTotal relatedBlockLimit) { $('.first-article-divide').append('div class="related-content group-one"h3 class="related-content-title"Also In Bonds News/h3ul/ul/div'); $('.second-article-divide').append($('.slider.slider-module')); $('.third-article-divide').append('div class="related-content group-two"h3 class="related-content-title"Also In Bonds News/h3ul/ul/div'); var median = (relatedItemsTotal / 2); var $relatedContentGroupOne = $('.related-content.group-one ul'); var $relatedContentGroupTwo = $('.related-content.group-two ul'); $.each($relatedItems, function(k,v) { if (k + 1 = median) { $relatedContentGroupOne.append($relatedItems[k]); } else { $relatedContentGroupTwo.append($relatedItems[k]); } }); } else { $('.third-article-divide').append($('div class="related-content group-one"h3 class="related-content-title"Also In Bonds News/h3ul/ul/div')); $('.related-content ul').append($relatedItems); } },500); } Next In Bonds News UPDATE 1-British consumers borrow at fastest rate in 11 years as inflation threat rises LONDON, Jan 4 British consumer borrowing increased by the biggest amount in more than 11 years in November, boosting the unexpectedly robust post-Brexit vote economy in what could prove to be a big spending spree ahead of an expected rise in prices. BRIEF-US Concrete says its proposed offering of $200 mln aggregate principal amount of its 6.375 pct senior notes due 2024 * US Concrete Inc says its proposed offering of $200 million aggregate principal amount of its 6.375% senior notes due 2024 Source text: [this site] Further company coverage: Kazakhstan 2016 inflation slows to 8.5 pct year-on-year MOSCOW, Jan 4 Inflation in Kazakhstan slowed to 8.5 percent in 2016 from 13.6 percent in 2015, the Statistics Committee said on Wednesday. MORE FROM REUTERS window._taboola = window._taboola || []; _taboola.push({ mode: 'organic-thumbnails-a', container: 'taboola-recirc', placement: 'Below Article Thumbnails - Organic', target_type: 'mix' }); Sponsored Content @media(max-this site) { #mod-bizdev-dianomi{ height: 320px; } } From Around the Web Promoted by Taboola window._taboola = window._taboola || []; _taboola.push( { mode: 'thumbnails-3X2', container: 'taboola-below-article-thumbnails', placement: 'Below Article Thumbnails', target_type: 'mix' } ); window._taboola = window._taboola || []; _taboola.push