Rating downgrades continue

The fixed deposit programme of PNB Capital Services was the second instrument downgraded by Crisil when the rating agency pulled down the rating assigned to it to FA-8216; from FA8217;. The agency release said that the revised rating reflects the deterioration in business profile on account of the discontinuation of fresh fund based activities and decline in asset quality signified by increasing debtor levels.

quot;The rating also takes into account theincreasing financial risk profile due to diminishing income streams coupled with high interest costs on the borrowings and significant repayment liabilities in the short to medium term,quot; said a Crisil release issued on Friday.

In a separate rating analysis, Icra downgraded the ratings assigned to two fixed deposit programmes of two non-banking finance companies: Leafin India Ltd and Zuari Leasing amp; Finance Company. quot;Both the NBFCs8217; fixed deposit instruments have been downgraded to MB8217;, indicating inadequate safety,quot; a press release issued by Icra rating agency on Friday said. The release cautioned that the rating assigned to Leafin India has also been placed under rating watch with negative implications.

quot;The downgrade factors in the strained liquidity position of the company caused due to the slowdown in collections and other resource constraints which have had an adverse impact on the debt servicing ability of the company,quot; the release added.

Crisil has downgraded Saurashtra Cement8217;s Rs 58.15-croredebenture issue from BB8217; to C8217;. The downgrade is triggered by the significant deterioration in internal accruals due to the oversupply situation in the Gujarat production region and the consequent pressure on realisations, a Crisil release said. Consequently, the ongoing Rs 297-crore Saurashtra Cement expansion project is being funded with a large proportion of debt, the rating agency said.