Crisil today said it had downgraded ratings on the long-term debt of DSP Merrill Lynch and DSP Merrill Lynch Capital from 'AAA' to 'AA+' and also revised the outlook from stable to negative. Similarly, the agency revised the outlook on long-term ratings of Citicorp Capital Markets, Citicorp Finance (India), Citicorp Maruti Finance and CitiFinancial Consumer Finance India from stable to negative. "This action is a part of a re-examination by Crisil of its ratings on financial sector institutions in India that draw support from the credit strength of foreign parents," the agency said in a statement. |
When contacted, Crisil senior director S Venkatraman added, "We have seen a fair amount of stress in global companies."
He added that the revised mapping factors in an assessment of the global financial sector and the economic scenario as also the continuing uncertainty in the earnings profile of the US broker-dealer industry. Merrill Lynch has a large exposure in the United States, while Citigroup has a large exposure in both the US and Europe.
"Credit profile of Merrill Lynch, uncertainty in Citigroup's earnings and the pressure on Citigroup's credit risk profile are the factors which led to the revision," Venkataram said.
A Citi India spokesperson said: "We do not believe that this action is unique or specific to Citi's NBFCs in India. Each one of our NBFCs remains well capitalised and we continue to review capital infusion requirements into our various legal vehicles as required by business needs."