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Rpt fitch revises power finance corporations outlook to stable; affirms i


´╗┐(Repeat for additional subscribers)June 13 (The following statement was released by the rating agency)Fitch Ratings has revised the Outlook on India-based Power Finance Corporation Limited's (PFC) Long-Term Issuer Default Rating (IDR) to Stable from Negative and affirmed its IDR at 'BBB-'. Fitch has also affirmed PFC's senior unsecured rating and USD1bn senior unsecured medium-term notes programme at 'BBB-'. KEY RATING DRIVERS The rating action follows Fitch's revision of the Outlook on India's Foreign and Local Currency IDRs to Stable from Negative (see rating action commentary "Fitch Revises India's Outlook to Stable; Affirms Ratings at 'BBB-' dated 12 June 2013 at this site).

PFC's rating reflects the entity's public sector status, government ownership, and strong operational and strategic ties with the government, resulting in a high likelihood of extraordinary government support if needed. As such PFC has been classified as a dependent public sector entity under Fitch's criteria and the rating is credit-linked to that of the sovereign. PFC is the central agency on behalf of the government of India (GoI) in implementing the government's restructured-accelerated power development and reform programme and ultra mega power projects aimed at reducing transmission and distribution losses and increasing power generation capacity respectively. The GoI presently owns a 73.7% majority stake in PFC, after having reduced its stake twice in the last six years. It has a track record of providing support to PFC through permission to issue tax-free bonds, raising foreign commercial borrowing up to 75% of its net worth without prior government approvals, as well as providing funds from budgetary allocation and debt guarantee. Fitch expects PFC will continue to receive support from the GoI. The Ministry of Power signs a memorandum of understanding with PFC every year to set its annual operational and financial performance targets, which it reviews on a quarterly basis. The Comptroller and Auditor General of India appoints auditors of PFC on an annual basis.

PFC loans have risen by over 100% since the financial year to March 2010 due to strong demand from rural areas as well as government policy to extend coverage. Loan demand is forecasted to remain strong with projected growth of 42% by FY15. Part of the growth will be funded by borrowing and debt is projected to rise 40% by this date. Concentration risk arises from PFC's exposure only to the power sector with the top five borrowers accounting for around 29.2% of its total exposure as of March 2013. However, this risk is partly mitigated by state government's guarantees for part of its loan assets and the use of escrow accounts.

PFC's capital adequacy ratio stood at 17.98% at end-FY13 with a Tier 1 ratio of 16.83% which provide sufficient buffer to the regulatory requirements of 15% and 10%, respectively. PFC's high profitability is characterised by its reasonable interest spread and return on assets at 2.87% and 2.89% at end-FY13 respectively. RATING SENSITIVITIES A positive rating action would stem from a similar change in the ratings of sovereign in conjunction with continued strong explicit and implicit support from the government. Material changes to its strategic importance and central agency status in the power sector or a further dilution in the government shareholding to less than 51% could result in the entity no longer being classified as a dependent public sector entity and therefore no longer being credit-linked to the sovereign rating.

Singapore readies up to $11 bln in loans for oil & gas linked firms


´╗┐SINGAPORE Nov 25 Singapore plans to offer financial assistance to its liquidity-hit marine and offshore engineering companies that could help them raise as much as S$1.6 billion ($1.1 billion) in loans. The two-year downturn in oil prices has forced several firms, including oilfield services firm Swiber, oil and gas service provider Swissco Holdings Ltd and container ship owner Rickmers Maritime, to seek restructuring of their debt. Billions of dollars have been wiped off the market value of the sector's listed companies and thousands of jobs have been axed in the worst-hit area of Singapore's slowing economy. Many of the companies in the affected sectors have not been able to issue debt or get bank loans.

Singapore's Ministry of Trade and Industry (MTI) said in a statement on Friday the loans it is organising will be available from next month and could "catalyse" about S$1.6 billion in total financing to the sector over the next year. The MTI said it will introduce a scheme allowing affected companies to borrow up to S$5 million for up to six years. A borrower group can tap financing of up to S$15 million.

A separate finance scheme aimed at assisting with project and asset financing support will be enhanced so that the maximum loan will be raised to S$70 million per borrower group from the current S$30 million, it said. The statement did not provide any details on the financing costs. The facilities will be administered by government agencies SPRING and IE Singapore through local banks. The government will take 70 percent of the financing risk for both the schemes.

"The industry's financing challenges have intensified in recent months. Some industry consolidation is inevitable as companies restructure and adapt to the challenging environment," Minister for Trade and Industry S Iswaran said."The government will continue to monitor the economy closely and stands ready to act if necessary."Those that qualify for the scheme include shipyards and their contractors, exploration, production and offshore services firms, oil and gas equipment and services companies and their suppliers.