Fitch affirms Karnataka State

Fitch Ratings said it affirmed the long-term ratings of AA-(ind)(SO) on both the Rs.500 million long-term bond program of Karnataka State Industrial Investment & Development Corp. and the Rs.3 billion long-term bond program of Karnataka State Financial Corp.

The ratings continue to reflect the credit profile of the Government of Karnataka as it unconditionally and irrevocably guarantees the repayment of principal and interest, Fitch said.

In Fitch's view, the government's finances continue to exhibit strength and it is not expected to face any difficulty in discharging its guarantee obligations, if called upon to do so.

Close monitoring and rigorous implementation of the structured payment mechanism by the bond trustees can go a long way in ensuring timely debt service, the agency said.

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