Tools soon to ease municipal borrowings

The partial credit enhancement facility, in which infrastructure financer National Bank for Financing Infrastructure and Development (NaBFID) will provide a guarantee to lower-rated firms’ corporate bonds is expected to reduce the borrowing cost by 50-150 basis points, as per initial assessment.

- SAIKAT DAS

The facility will help companies get rating upgrades to their bond issuances, say officials.

"The partial credit enhancement facility can significantly lower borrowing costs for companies by improving their credit ratings. This facility will be particularly beneficial for lower-rated entities, enabling them to secure better credit ratings for bond issuances," said Sujit Kumar, chief economist, NaBFID.