Moody's rates Rural Electrification Baa3

Moody's Investors Service said it assigned first-time Baa3 local- and foreign-currency issuer ratings to Rural Electrification Corp. Ltd.

The outlook is stable.

The ratings are based on Moody's methodology for government-related issuers. The ratings reflect the ownership and support the company receives from the government of India and the niche market in which the company operates, Moody's said. The company plays a lead role as a facilitator in financing the development of power infrastructure and rural electrification in India. The number of villages that has benefited from this electrification program have risen from 74,000 in 1969 to 438,484 as of March 31, 2006, the agency said.

Solid capitalization, good profitability and diversified funding sources also are inherent strengths, Moody's said.

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