Fitch Ratings has today assigned Tata Steel Limited's (TSL) INR30bn non-convertible debenture (NCD) programme a National Long-term rating of 'AA(ind)'. This amount was increased from the INR20bn initially proposed (see Rating Action Commentary dated 24 April 2009 on www.fitchresearch.com). Fitch has also affirmed TSL's National Long-term rating at 'AA(ind)' with Negative Outlook. Simultaneously, Fitch has affirmed the ratings on its various facilities and borrowings, details of which are listed at the end of this announcement.
The proceeds of the NCD, along with the existing cash balances available with TSL, would be partly used to meet additional equity infusion into Tata Steel UK (TSUK) and partly prepay some of its debt obligations in TSL. The equity infused in TSUK would be used to prepay some of the debt obligations at TSUK and the balance would be retained within the business. The consolidated net debt on account of this transaction is expected to remain unchanged.
Fitch has also affirmed the National ratings on TSL debt instruments as follows:
Long term debt aggregating INR58.5bn: 'AA(ind)';
Non-convertible debenture of INR20bn: 'AA(ind)';
Non-convertible debenture issue of INR12.5bn (reduced from INR15bn): 'AA(ind)';
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Fund-based cash credit limits of INR10.6bn and non-fund based limits of INR23.4bn: 'AA(ind)';
Fund-based limits of INR7.25bn and non-fund based limits of INR7.6bn: 'F1+(ind)'; and
Commercial paper/short-term debt of INR9.75bn: 'F1+(ind)'.
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