Care downgrades IFCI's long, medium ratings to junk status
By Our Banking Bureau | 23 Apr 2003
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Mumbai: Rating agency Care has downgraded Industrial Finance Corporation of India's (IFCI) long- and medium-term debt ratings to junk status.
While the agency has retained the Care BB rating on the fixed deposit programme of the financial institution, it has reduced its preference share issue to default status (Care D), a press release from the agency said.
According to Care, the downgrade follows persistent delays in debt servicing on IFCI's bonds. It has also skipped dividends on preference shares.
The institution's financial position has been very weak for the past few years with a high level of non-performing assets, large asset-liability maturity mismatches, low-capital adequacy and declining spreads.
The rating agency goes on to add that in view of its weak financial position, it is unlikely that IFCI would be able to meet its debt obligations in a timely manner.
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