After IL&FS, securitisation... India's Lehman genie out of the bottle again

First, it was the IL&FS Group that ran out of money. Now that the bankrupt Indian infrastructure lender-operator has been sequestered from creditors, the country’s securitization industry is on borrowed time. 

It all began on Tuesday with S&P Global’s Indian affiliate, Crisil, downgrading Jharkhand Road Projects Implementation Co.’s annuity-backed bonds to D after it skipped interest and principal payments. It’s a strategic default on an instrument rated AA just last week. The borrower had money. It reneged on the obligation because the IL&FS parent and 348 group companies have been allowed by the country’s bankruptcy tribunal to block creditors while a