Care downgrades IFCI debt to speculative
By Our Banking Bureau | 11 May 2002
Mumbai: Credit Analysis and Research Ltd (Care) has downgraded the ratings of Industrial Finance Corporation of Indias (IFCI) long- and medium-term debt to Care B from Care A signifying high susceptibility to defaults. Also, the ratings of IFCIs preference share issue has been downgraded to Care C from Care BBB+, and the ratings of the fixed deposit programme has been downgraded to Care BB from Care A-. The ratings are in the speculative grade and will remain on credit watch.
The downgrade follows the continued deterioration in IFCIs financial health with declines in total income and profitability and high provisioning requirements in the nine-month period ended December 2001.
The consequent strain on liquidity and an adverse asset liability mismatch have resulted in IFCI delaying payments on some of its debt obligations. IFCI is reportedly in dialogue with institutional lenders for restructuring its liabilities.
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