The Tata group special purpose vehicle (SPV) floated to acquire the government’s stake in Videsh Sanchar Nigam (VSNL) is coming out with a one-year non convertible debenture issue in the nature of a deep discount bond. The issue has been rated P1+(SO) (very strong with relatively higher standing within the category structured obligation) rating by Crisil.

The Rs.1,300 crore issue has been co-guaranteed by Tata Sons and Tata Power in the ratio of 60:40 which is the same as their shareholding in the SPV. This is probably the first time that more than one guarantor is available for a SPV raising money for a buy-out.

The rating of Panatone Finvest (PFL) is based on the strength of the unconditional and irrevocable corporate guarantees provided, the legal opinion regarding the enforceability of the said guarantees, the payment structure designed to ensure full and timely payment to the investors and also the strength of a set of warranties from PFL said a press release.

Speaking to ET, Tata Sons Finance director Ishaat Hussain said, "This shows that we can digest a major acquisition like VSNL and still maintain our ratings."