CARE assigns 'A-(SO)' rating to Punjab Infrastructure Development Board
The rating is primarily based on the proposed credit enhancement of the instrument in the form of unconditional and irrevocable guarantee of the Punjab government and structured payment mechanism, for timely servicing of bond interest and principa...
By INDIATIMES NEWS NETWORK |
MUMBAI: CARE has assigned ‘in principle CARE A-(SO)” rating to the Rs 150 crore bond issue of Punjab Infrastructure Development Board. The rating is primarily based on the proposed credit enhancement of the instrument in the form of unconditional and irrevocable guarantee of the Punjab government and structured payment mechanism, for timely servicing of bond interest and principal repayments.
Instruments with this rating are considered to offer adequate safety for timely servicing of debt obligations. Such instruments carry low credit risk.
The rating factors in favorable socio-economic infrastructure of the Punjab state, good growth in revenue receipts over the years and buoyancy in own tax revenue. Enactment of Fiscal Responsibility Bill and measures undertaken by the state government to promote the secondary and tertiary sectors of the state’s economy are other favorable factors. However, the rating is constrained by limited financial flexibility of the state as reflected by high level of committed expenditures and high outstanding liabilities of the state.
Instruments with this rating are considered to offer adequate safety for timely servicing of debt obligations. Such instruments carry low credit risk.
The rating factors in favorable socio-economic infrastructure of the Punjab state, good growth in revenue receipts over the years and buoyancy in own tax revenue. Enactment of Fiscal Responsibility Bill and measures undertaken by the state government to promote the secondary and tertiary sectors of the state’s economy are other favorable factors. However, the rating is constrained by limited financial flexibility of the state as reflected by high level of committed expenditures and high outstanding liabilities of the state.
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