Investors Service has confirmed the Ba2 foreign currency issuer
rating (the ceiling for such debt in India) of Industrial Finance
Corporation of India (IFCI).
In confirming the issuer
rating, Moodys has relied on the governments support, which
was made available to the institution when it wanted to meet its
foreign currency obligations.
The rating agency has
said a possible default on IFCIs commitments to its foreign
lenders would seriously impair international confidence in India,
a scenario it believed the government would like to avoid at all
costs, according to a press release issued here.
But Moodys has pointed
that despite the recent Rs 1,000-crore recapitalisation, IFCI
still faces severe liquidity problems, resulting in at times
finding it difficult to repay principal amounts on its local