Power finance Corporation Ltd

By 19 January 2000 | 19 Jan 2000

  • Bonds issue - Rs. 600 crore Rating : AAA
  • Fixed deposit programme Rating : FAAA

CRISIL has placed the outstanding 'AAA' (pronounced 'Triple A') ratings assigned to the Bonds issue and the outstanding 'FAAA' (pronounced 'F Triple A') rating assigned to the Fixed Deposit Programme of Power Finance Corporation Ltd.(PFC) under Rating Watch with developing implications.

The outstanding ratings have been put under Rating Watch with developing implications in view of PFC's proposal to buy back around 20% of its shares for a consideration of Rs. 5770 million. Although, the proposed buyback would result in a reduction of the capital and consequently capital adequacy ratios of PFC, CRISIL believes that PFC's existing capitalisation is robust enough to absorb the impact of the proposed buyback of equity and it is unlikely that the company's credit profile would change in relation to CRISIL's benchmarks for the outstanding rating categories.

CRISIL is in dialogue with the management of PFC to ascertain the various modalities and implications of the above initiative. A final view on the rating would be taken after making a detailed assessment of the impact of these developments and the company's ongoing business and financial performance.