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Strategies & Market Trends : India Coffee House

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To: Worswick who wrote (687)	5/20/1998 11:26:00 AM
From: Mohan Marette	of 12475

What is with S&P ? Affirms BB+ rating on India! Worswick and everyone: I thought they would have downgraded the sovereign rating of India in the wake of the recent developments etc. Source:Business Standard.[for private use only] ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Standard & Poor's implicitly reaffirms existing foreign currency rating of 'BB+' on India Our Banking Bureau in Mumbai Standard & Poor's (S&P) has implicitly reaffirmed its existing foreign currency rating of 'BB+' on India by assigning a 'BB+' long-term foreign currency rating to National Thermal Power Corporation (NTPC), with a stable outlook. NTPC is a 100 per cent government-owned wholesale power generator. While all obligations rated less than 'BBB' have speculative characteristics, a 'BB+' rating indicates the least degree of speculation. By assigning a stable outlook, S&P has indicated that its ratings are unlikely to change soon. This should boost the sentiments of foreign investors, who were apprehensive that the sanctions imposed following India's decision to test five nuclear devices would have a negative impact on the revival of the economy. The implicit reaffirmation of the sovereign rating will also act as a shot in the arm for the Indian government, which has sought to downplay the economic impact of the sanctions imposed on India. "The foreign currency rating reflects the sovereign credit risks associated with the BB+ foreign currency rating on the Republic of India", said a release issued by Standard & Poor's. S&P has, however, sounded a note of caution with regard to NTPC's financials and stated that "should the creditworthiness of the state electricity boards weaken further and not be addressed through continued assistance from the Central government, NTPC's financial position could deteriorate and its rating decline".

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