Care downgrades IFCI debt to speculative
Our Banking
Bureau
11 May 2002
 Mumbai: Credit
Analysis and Research Ltd (Care) has downgraded the ratings of
Industrial Finance Corporation of India’s (IFCI) long- and
medium-term debt to Care B
from Care A — signifying high susceptibility to defaults.
Also, the ratings of IFCI’s 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 IFCI’s
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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