Care downgrades IFCI's long, medium ratings
to junk status
Our
Banking Bureau
23 April 2003
 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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