Fitch rates West Bengal Infrastructure bonds A-(ind)

Fitch Ratings said it assigned West Bengal Infrastructure Development Finance Corp. a final rating of A-(ind)(SO) to its Rs. 10 billion (series 2007-08) bonds.

The final rating represents a one notch downgrade from the expected rating assigned to these bonds. Fitch also said it downgraded the ratings of bond series 2004-05 and series 2005-06 of Rs. 10 billion each to A-(ind)(SO) from A(ind)(SO).

The outlook is stable.

Since the repayment of principal and interest on all the three issues are unconditionally and irrevocably guaranteed by the government of West Bengal, the ratings reflect the underlying credit profile of the state, which has deteriorated since these bonds were originally rated, Fitch said.

West Bengal's public finances are characterized by high levels of government debt in relation to the state's gross state domestic product and current revenue, rendering any further debt expansion unsustainable, the agency said.

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