Fitch Ratings has assigned India-based
The proposed notes will be issued from REC's existing
Key Rating Drivers
The proposed notes are rated in line with REC's Long-Term Issuer Default Rating (IDR) on the basis that they will be issued under REC's programme and will constitute its direct, unconditional and unsecured obligations and rank pari passu with all its other outstanding unsecured and unsubordinated obligations.
Derivation Summary
Fitch assesses REC under our Government-Related Entities Rating Criteria, factoring in the company's strong linkage with the government and the government's incentive to provide support, with a high overall support score of 50. This results in the equalisation of REC's IDR with that of the Indian sovereign, irrespective of the company's Standalone Credit Profile.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
A positive change to the company's IDR will result in a similar change to the proposed notes.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Negative rating action on the company's IDR will result in a similar change to the proposed notes.
Best/Worst Case Rating Scenario
International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Issuer Profile
REC was established in 1969 and is a non-bank financial company registered with the
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
Public Ratings with Credit Linkage to other ratings
REC is credit linked to the Indian sovereign (BBB-/Stable).
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