Fitch withdraws 'AA' rating awarded to MCD
New Delhi: International agency Fitch Ratings on Friday withdrew its 'AA' rating awarded to Municipal Corporation of Delhi (MCD) following the civic body's trifurcation.
In a statement, Fitch Ratings said it has withdrawn MCD's National Long-Term rating of 'Fitch AA-(Ind)/Stable.
"The rating withdrawal is due to the trifurcation of the local body effective from April 30. As a result, MCD will cease to exist from May 1. The agency will no longer provide ratings or analytical coverage of MCD," it said.
Fitch Ratings, in its report last September, affirmed the National Long-Term Rating of "AA-(ind)" to MCD and said the civic body's outlook was stable.
An 'AA' national rating denotes expectations of very low default risk relative to other issuers or obligations in the same country.
It had then advised the MCD to improve revenue income saying it would provide a "sufficient cushion" to its finances and act as a positive rating trigger.
The agency had commended the MCD for earning carbon credits in better management of revenue and capital accounts, increase in tax and non-tax revenues and launching of e-governance project and even said coverage of solid waste services in Delhi is "much better" than in other large cities in India.
It also noted that the quality of roads coverage and other civic infrastructure in Delhi are much better than that of other cities in India.
However, the rating agency was critical of MCD's implementation of JNNURM projects saying Fitch considers that MCD may not be able to execute all the projects identified for investment.