Infra bonds freed from credit rating

Infra bonds freed from credit rating

With an aim to encourage investment flow to all- important infrastructure sector, the Union Budget for current fiscal had provided for tax benefits in the long-term infrastructure bonds.

Taking forward the issue, the government has begun the process of allowing the issuance of tax-free infrastructure bonds by selected Non-Banking Financial Companies (NBFCs).

However, the grant of permission for issue of such bonds has omitted the requirement of credit ratings, sources said. In any bond issuance exercise, the issuer has to generally get bond rated by two different credit rating agencies, so that the investors get an idea about the risk profile of the bond.

No such condition is being put on tax-free infrastructure bonds to be issued by the selected NBFCs under this programme, sources said.

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