Chandrababu Naidu floated Amaravati Bonds on the Bombay Stock exchange in 2018. The listing got a bumper response and the Government raised 2000 Crore from the investors.
Back then, CRISIL rated Amaravati Bonds at A+. But things have changed with the government and Amaravati has become the least priority for Jagan Government.
The state government which is the guarantor of these bonds is not even giving funds to APCRDA to repay its loans.
The government is keeping the Bond servicing accounts empty when the interest payments are due. That has brought doubts over the Andhra Pradesh government’s repaying capacity.
Hence, CRISIL downrated these bonds to A – now.
CRISIL arrived at a conclusion that the financial position of Andhra Pradesh is bad and the Government is carrying out its day-to-day affairs using RBI’s ways and means and overdraft facilities.
CRISIL downrating Amaravati bonds rating is a dent to the image of the State Government. It will give a very bad impression of the state to the investors.
This downgrading comes a day after YSR Congress filed an affidavit in the Supreme Court supporting freebies.