Commenting on S&P's recently changed outlook from stable to negative for Indian paper, the officials said that PFC had a good track record and had been raising international debt on attractive terms. The shift in credit rating has nothing to do with the company's profile, they said adding that the issue received a good response during the road show and will ``sail through comfortably.'' Since PFC is a government-owned undertaking, any change in sovereign rating would affect it also but this has been countered by the fact that it has been making profits and is professionally managed. Since its inception in 1986, the company has been growing steadily and has expanded its operations to cover more areas.

Last year, PFC madeits maiden $75 million ECB at 50 basis points above Libor with an average five- year maturity. It also tapped the bond market with a 12-year Euro issue of $100 million. PFC had, in 1997, arranged a DM 100 million line of credit with IKB Deutsche Industrie Bank of Germany and is now negotiating similar agreements with other export credit agencies. The company recently launched its seven- year syndicated loan issue which is priced at a coupon rate of 115 basis points above libor. The loan has a put option to the lender after five years. PFC has tremendous growth potential as it is committed to financing power sector-related projects for which demand is very high. Support from the centre in the form of tax rebate on investment in infrastructure projects eventually enhance PFC's value to investors, officials said.

To encourage private sector investment in power, the centre has several incentives for project developers.

As part of its efforts to help the power sector, PFC has also been permitted to extendfinancial support to private players. This, again, has bettered its prospects, officials added.

According to analysts, S&P's credit rating BB+ for India's long- term foreign currency borrowings and BBB+ for its local currency issues with negative outlook seem to have been based on a premature assumption that the Indian economy will be hit due to the economic sanctions imposed by the US and Japan.

PFC, which is targeting Asia, Europe and Middle East markets for its $100 million ECB issue, may find the response from Japan lukewarm but this will be made up in other countries, they added.