Fitch rates Andhra Pradesh program A+(ind)

Fitch Ratings said it assigned an expected national A+(ind)(SO) rating to Andhra Pradesh State Financial Corp.'s Rs. 1.5 billion long-term bond program. This includes an option by the company to retain excess subscription of up to Rs. 500 million. The agency also affirmed the A+(ind)(SO) rating on its Rs. 500 million bonds, guaranteed unconditionally and irrevocably by the state, issued in August 2007.

The issues will help augment the company's resources for fresh lending, the agency said. The repayment is unconditionally and irrevocably guaranteed by the government of Andhra Pradesh.

The rating also considers the proposed agreement among the government, the company and the trustees as well as the trust deed that the company will execute with the trustees, empowering the latter to administer a repayment mechanism to ensure timely payment of dues to bondholders, Fitch said.

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