ICRA confirms rating of MSEB Residual Board.
BANKING AND CREDIT NEWS-30 August 2010-ICRA confirms rating of MSEB Residual Board(C)1994-2010 M2 COMMUNICATIONS http://www.m2.com
30 August 2010 - Indian credit rating agency ICRA confirmed Friday the rating of LBB (SO) on the INR2bn (USD43m/EUR34m) bond issue of local utility MSEB Residual Board (MSEBRB).
The rating primarily reflects the intrinsic credit quality of the state government of Maharashtra (GoM) as well as the adherence of MSEBRB to ICRA-stipulated structure conditions for servicing the rated bonds. The rating is supported by an unconditional and irrevocable guarantee from GoM along with budgetary provisions for payment of interest and principal in the annual budget of GoM.
However, the rating is constrained by the history of delays in payment of interest to investors because of a delay in receipt of funds from the GoM and the non-compliance of MSEBRB with a number of structure conditions stipulated by ICRA. ICRA would continue to monitor the compliance with its structure conditions and take appropriate rating action, if material deviations from them are observed in the future.
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