Bankruptcy Expert Edward Altman Says It’s Too Easy To Get A High Credit Rating In India

Bonds
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Interesting perspective on credit ratings in India.

In the recent past, we have had a number of high-profile snafus in AAA and AA rated bonds.

  • In September 2018, one-day IL&FS was rated AAA and the next it was downgraded 9 notches to default.
  • Most recently DHFL was downgraded from AAA to AA. This happened after the allegations against the companies and subsequent crack in the stock and bond prices.
  • Reliance Home Finance Limited (RHFL) bonds are currently available at yields of 25% to 35%. The company’s bonds are rated AA.

1-month chart of Reliance Home Finance bonds

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2 Likes
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I think it’s maybe easy to do in booming economics like India, there you really can get a credit easier than for example in America, correct ? Which maybe is nothing good but still create some money flow even faster than needed and lot of people just do not pay at all their obligations;(