CRISIL grants 'AAA(so)' rating for Tata Motors debentures

CRISIL has assigned its rating of ‘AAA(so)/Stable’ to Tata Motors Ltd’s (TML’s) secured, guaranteed, low-coupon, premium redemption debentures. The rating is based on the irrevocable and unconditional guarantee provided by State Bank of India (SBI, rated ‘AAA/Stable/P1+’ by CRISIL) securing all principal, redemption premium and interest obligations, and on the payment structure that is designed to ensure full and timely payment to the lenders. The guarantee can be invoked by the trustee, Vijaya Bank, in the event the designated account is not funded by TML as per the transaction structure. Upon invocation of the guarantee, the guarantor, SBI, is liable to pay on demand, and not later than seven business days from the date of the notice, the full amount due by TML to the debt-holders. TML is required to reimburse SBI within 30 days for any amounts funded by SBI (upon invocation of guarantee) to the trust account for making a scheduled payment on the debentures.
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