Fitch rates Rural Electrification debt AAA(ind)

Fitch Ratings said it assigned an AAA(ind) rating to the Rs.140 billion long-term national debt program of Rural Electrification Corp. Ltd. for the financial year 2007-2008. The agency also said it affirmed the long-term foreign- and local-currency issuer default ratings at BBB-, the national long-term rating at AAA(ind), its senior unsecured debts at AAA(ind) and its commercial paper at F1+(ind).

The outlook is stable.

The ratings are based on Fitch's assessment of its strategic importance to the Government of India and on the support that is available to the organization, the agency said.

The agency also noted that governmental support has made available tax concessions that reduces the average cost of borrowing for the company. Coupled with a flexibility to invest almost its entire asset book in loans, that provides the company with margins comparable with the best Indian banks, Fitch said.

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