91% of bond issues worth Rs 9 lakh cr rated safe in H1 FY16

Mumbai: Indicating an improving credit profile of companies, 91 percent corporate bond issues worth Rs 8.94 lakh crore were rated to be safe for investment during the first half of the current fiscal, latest Sebi data shows.

During the April-September period of 2014-15, credit rating agencies (CRAs) had found a total 1,179 long-term debt securities amounting Rs 6.67 lakh crore, but had assigned a majority -- 639 issues worth Rs 24,329 crore -- a 'non-investment grade'.

CRAs assign a 'non-investment grade' to low-quality bonds that face the highest risk of default. Good quality bonds can be categorised under Highest Safety (AAA), High Safety (AA), Adequate Safety (A) or Moderate Safety (BBB).

A total of 479 long-term corporate debt securities amounting to Rs 8.98 lakh crore were rated during the April-September period of 2015-16.

Of these, only 41 issues worth Rs 4,285 crore were assigned 'non-investment grade' ratings by CRAs, during the first six months of the current fiscal.

Individually, 93 issues were assigned the top investment grade 'Highest Safety (AAA)' which were worth Rs 7.65 lakh crore, while 163 securities valued at Rs 87,405 crore fell under high-safety (AA) rating.

Besides, CRAs gave 113 issues an 'adequate safety (A)' grade and 69 were assigned the 'moderate safety (BBB)'ratings.

The data covers long term debt securities with maturities of one year and more.

As per the process followed by credit rating agencies, the assigned rating is communicated to the issuer for acceptance. In the case where the issuer does not find the rating acceptable, it can appeal for a review.

The rating agencies registered in the country include CRISIL, India Ratings and Research (formerly Fitch Ratings India), ICRA and Credit Analysis & Research (CARE).