Fitch says India Infrastructure Finance scheme is positive

Fitch Ratings said the credit enhancement scheme launched by India Infrastructure Finance Co. Ltd. (FitchAAA(ind)(SO)) on Jan. 5 will positively affect the ratings of infrastructure projects' debt.

Fitch understands that the company plans to guarantee up to 50% of the debt of operational infrastructure projects with the intention of improving the credit ratings from the BBB category on the Indian national scale. This scheme seeks to enable the projects to access the domestic bond market and refinance their existing bank debt.

The scheme may provide uplift to a project's debt rating provided that it is structured in a way that prevents default, the agency said. The extent of the uplift will depend on a number of project-specific qualitative factors and the structural features of the guarantee.

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