S&P revises outlook on PFC to negative, flags concern on capital level

The company has an extremely high likelihood of timely and sufficient extraordinary support in the event of financial distress

Global rating agency Standard and Poor's (S&P) has downgraded the outlook on Power Finance Corporation (PFC) from "stable" to "negative". 

The negative outlook reflects the view that PFC's risk-adjusted capital is the lower end of the threshold for a strong assessment, S&P said in a statement.

S&P affirmed the 'BBB-' long-term issue rating on PFC's outstanding debt. The rating agency did not factor in a potential merger of PFC with another Indian government-owned finance company, REC Ltd.

The assessment could be revised if