Page 8 - Credit Rating

S&P reaffirms B+ rating for Tata Motors, keeps outlook 'negative'

Ratings agency S&P has reaffirmed Tata Motors' long-term issuer and issue credit ratings to be 'vulnerable to nonpayment' while keeping the outlook negative. S&P Global Ratings said it has reaffirmed 'B+' on Tata Motors' long-term issuer and issue credit ratings while keeping negative outlook due to high cash burn at its British arm Jaguar Land Rover, geopolitical risks such as Brexit and the US tariffs, and India's automotive market slowdown. The ratings agency has also removed the company from CreditWatch stating geopolitical risks could take longer than expected to play out. "We expect Tata Motors' cash flow to stay negative at least for the next 12-24 months until global automotive demand recovers, the company's Chinese operations stabilise, and the expected cost cutting restores its financial health," S&P said in a statement. Tata Motors' first-quarter fiscal 2020 performance remained weak, despite expectations of a recovery over the next 12-24 months, it added. "In

Sovereign bonds & credit ratings

At the end June 2019, the RBI's foreign exchange (FX) reserves amounted to about $422 billion. This is around 15 per cent of GDP way below the 26 per cent of GDP level of FX reserves in 2007-08

Don't go by credit rating alone, consider default analysis, performances

Look up performance parameters: Investors should look up a metric called credit default analysis, available on rating agencies' websites, to compare performance vis-a-vis their peers

India, Russia to develop 'independent' credit rating industry

India and Russia today vowed to develop a credit rating industry that is "independent from political conjecture" -- a move that follows apprehensions about global agencies being biased towards large economies like the US and China. In a joint declaration, Prime Minister Narendra Modi and Russian President Vladimir Putin also said they would also explore harmonisation of the respective laws in the two countries regarding credit ratings. The move assumes significance in the wake of several commentators and policy makers in India raising concerns that the global rating agencies have not been upgrading India's sovereign credit rating despite its improving economic and political fundamentals, even as China was viewed favourably by the same agencies. Globally, there are a handful of rating agencies and most of them are headquartered in the US. Most of the agencies including Fitch, S&P and Moody's have given India the lowest investment grade rating -- just a notch above the junk ...

Watch out for credit risk in corporate debt paper

Betting on high-risk debt, investing in an MF with high credit risk can hurt in current environment