Crisil grants AAplus rating to Ballarpur Industries SDO issue
10-year tenure with semi-annual interest payments
The credit rating agency CRISIL has assigned AAplus rating to the Rs 1.5 bn structured debt Obligation (SDO) issue of Ballarpur Industries Ltd. (BILT). The press release said, `` The rating is based on a `Partial Guarantee ` to be provided by the International Finance Corporation (IFC) and is supported by structured payment mechanism to facilitate timely payment of debt obligations. The rating indicates high safety with regards to timely payment of interest and principal.``
This is the first partially guaranteed instrument to be rated in the Indian debt market. CRISIL has devised a new rating methodology for rating such instruments and expects this new concept to be a powerful financing tool.
The proposed issue has a tenure of 10 years, with semi-annual interest and principal repayments. Principal repayments would commence at the end of the third year from the date of the issue.
IFC`s guarantee has two components – a rolling guarantee for two semi-annual installments and a back-ended guarantee covering the entire principal and interest.
