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CRISIL assigns A rating to Tata Motors Finance's bond issue

Nov 03, 2009 (M2 EQUITYBITES via COMTEX) --

Company: Tata Motors Ltd (TTM)

3 November 2009 - Indian credit rating agency CRISIL rated yesterday at A with a "stable" outlook the INR2bn (USD43m/EUR29m) subordinated bond issue of local financial services company Tata Motors Finance Ltd.

In addition, the agency confirmed at A with a "stable" outlook and at P1 the ratings on the respective long- and short-term bank facilities and debt instruments of the company.

CRISIL's ratings on Tata Motors Finance's debt programmes continue to be centrally based on the agency's ratings on the company's owner, Indian vehicles maker Tata Motors Ltd (BOM: 500570, rated A/"stable"/P1 by CRISIL), and factor in the strategic importance of Tata Motors Finance to Tata Motors, the latter's majority ownership of Tata Motors Finance and the support that it provides to the company.

Tata Motors Finance receives a significant level of business, financial and managerial support from Tata Motors; the company continues to be the captive financier for Tata Motors' vehicles. Tata Motors has also extended support by sharing the loss risks on certain models in the previous year and may continue to do so, going forward. It has infused equity capital in Tata Motors Finance regularly, including INR2bn in financial 2008/09, ended on 31 March 2009. It has also made available an inter-corporate deposit line to Tata Motors Finance, thereby demonstrating its commitment to providing capital and liquidity support as and when required.

CRISIL further believes that, given the operational synergies between the two companies and the shared name, Tata Motors will continue supporting the subsidiary.

CRISIL's rating outlook on Tata Motors Finance's debt and bank facilities is closely linked to its rating outlook on Tata Motors. CRISIL believes that Tata Motors Finance will remain strategically important to Tata Motors, and will continue to benefit from capital and management support provided by the owner. Changes in the outlook or ratings on Tata Motors may lead to a similar change in the outlook or ratings on Tata Motors Finance. 

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Company: Tata Motors Ltd (TTM)


Related terms: bank, bond, business, corporate, debt, equity, finance, financial services, local

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