Moody's may downgrade Power Finance

Moody's Investors Service said it placed on review for downgrade the Baa3 issuer ratings of Power Finance Corp. Ltd. and REC Ltd.

Moody's also said it placed on review for downgrade the provisional Baa3 foreign-currency senior unsecured medium-term note program ratings and Baa3 foreign-currency senior unsecured ratings of Power Finance and REC.

The agency also said it placed on review for downgrade Power Finance and REC's standalone credit profiles of Ba3.

The downgrade review is driven by the decision by the government of India to grant an "in principle" approval for Power Finance acquisition of the government's entire 52.6% stake in REC, Moody's said.

The agency said it believes the acquisition is credit negative for Power Finance because it will materially weaken its consolidated capital ratios.

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