S&P lowers ICICI, IDBI and BoB ratings

By Our Special Correspondent

MUMBAI, AUG. 9. Standard & Poor's (S&P) today revised its ratings outlook to negative from stable on ICICI, Industrial Development Bank of India and Bank of Baroda.

The `BB' long term and `B' short term counter-party credit ratings on all three financial institutions are affirmed.

``The above outlook changes reflect a revision of the long term foreign currency outlook on the Republic of India to negative from stable on Tuesday," S&P stated. At the same time, the local currency long-term rating on the Republic of India was lowered to `BBB minus' from `BBB'. S&P affirmed its `BB' long-term and `B' short-term foreign currency sovereign credit rating and `A-3' short term local currency sovereign credit rating on India. The outlook on the local currency long term ratings was also revised to negative from stable.

The downgradation of the sovereign rating reflects unchecked budget deficits and rising domestic indebtedness. India's general budget deficit, which includes both the Central and State governments, is likely to exceed 10 per cent of GDP in the current year. ``Central Government debt could approach 70 per cent of GDP, or more than 400 per cent of revenues - higher than in most similarly rated countries," S&P stated.

It added, ``the outlook revision reflects rising concern that public finances might worsen further in the years to come, as vested interests continue to thwart public sector reform."

PTI reports:

IOC's issuer rating `stable'

NEW DELHI, AUG. 9. Moody's Investors Service has amended its outlook on Indian Oil Corporation's BA2 issuer rating from positive to stable.

According to a statement issued by the London-based agency today, the outlook change followed the similar amendment in the country's sovereign foreign currency rating outlook, and does not reflect any change in IOC's underlying business risk.

IOC's rating was constrained by the sovereign rating of the country, it added.

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Section  : Business
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