Fitch Rating India Private Limited

> Fitch is committed to provide transparent rating process, objective and timely credit perspective and responsive leadership to the market

> How do they do that?

– Improved communication leads to better credit appreciation thereby leading to improved pricing

> Leads to market pricing credit risk appropriately

– Improved visibility create higher demand

> Leads to reduction in your turnaround time in market

Why Fitch?Fitch is an effective and proven alternative, offering issuers and their advisors the

benefits of:

> Critical mass coverage

> Broad investor acceptance

> Clear and transparent methodologies and processes

> Highly skilled, experienced and accessible analysts

> A ’best in class’ research offering to a world wide client base of credit risk managers and investors – a great shop window for issuer visibility

> A complete range of rating products

> A strong ‘service’ ethos dedicated to timely delivery of all aspect of its product and service offering

> Provide national ratings, which complements international ratings, in countries capped by a lower sovereign rating e.g. India, Sri Lanka, Thailand, Indonesia, Taiwan and Philippines

Fitch is the only international rating agency in India

> What it means for you?

– International research quality

– Experienced analysts with international exposure

– Low issuer to analyst ratio; 13-14 credits per analyst

– Global Visibility with investors

– Consistent rating methodologies

– Strong international brand leads to improved positioning with stakeholders

– Consistent rating methodologies

– Agency known for innovation, professionalism and thought leadership

– Only agency to offer both national and international ratings

– Participation of analysts from other geographies on rating committees

Fitch gives you international and national ratings – seamlessly

> Only agency who can give both national and international rating

– Brings out credit differentiation clearly

> Tata Chemicals

– International Rating BBB-

– Domestic Rating AA+(ind)

> Rural Electrification Corporation

– International Rating BBB-

– Domestic Rating AAA(ind)

– Efficient use of management time & effort

– Consistent Methodologies

Fitch gives you international and national ratings – seamlessly

Fitch’s unique advantage for Multinational Corporations> Fitch - the only international agency in India offers something unique for

multinationals

– Fitch offshore analyst interacts with parent in home country

– Local Analyst in India interacts with subsidiary

– Both analysts (one analyzing the international parent and other analyzing Indian subsidiary

participate in the rating committee discussions

– Ratings of MNCs influenced by parent support - management, technological, financial and

business support

– Leads to superior appreciation of credit issues. This is demonstrated in rating levels of

MNC arms rated by Fitch e.g. Caterpillar India rated AAA(ind)/stable and rated A+

internationally, IBM India rated AAA (ind)/stable and rated A+ internationally, Jabil Circuit

India rated AA(SO)(Ind) and rated BB+/positive internationally.

– One agency worldwide leads to easy mapping of foreign currency ratings to local ratings.

Indian arms of MNC’s tend to benefit from low foreign currency rating of India which is

BBB-

Strong Market leadership

> Fitch provides ratings on more financial institutions worldwide than any other rating agency

Source: Q4 2007; Figures exclude 1,418 German & Austrian Co-Ops as well as 282 German & Austrian Savings Banks

Transparency

> Detailed sector criterion available on website

– Criteria reports finalized in consultation with investors, thus ensuring consistency

> Transparent Process

– Report format designed to facilitate credit decision

– One report which goes to committee comes back to issuer after rating is assigned and same is released to investors on publication

– Issuer/Investor know what has gone into rating

– Analyst is available to investors/bankers for seeking opinion at any point of time before or after rating is assigned

Fitch provides fresh perspective

> Access to its vast global experience

– Fitch has rated partial guarantee structure on the basis of estimated recovery while competition rated it on basis of weighted average

– Investors felt reassured and paper was oversubscribed

> Internationally trained and experienced analysts

– Gives ability to notice geographical trends while appreciating local market conditions. Leads to more robust understanding of credit.

> Seamless integration with international operations

– Works closely with counterparts in other geographies thus giving unique ability to rate emerging asset classes viz. airports, port, railways where market understanding is still developing

Indian Corporate Group

> Part of Asia Pacific Corporate Group

> Resource, expertise, experience, service

– Team of over 50 corporate analysts in four locations

> High quality research and pro-active issuer dialogue

> Interdisciplinary and multi-cultural approach

> Low issuer to analyst ratio; 13-14 credits per analyst

Corporates

Sovereigns

FinancialInstitutions

StructuredFinance

Investment Grade Leveraged Finance

Strong Sector Credentials – Capital Goods (Partial List

below)

> Dedicated team of analysts specializing in Capital Goods linked with strong understanding of Power sector

> Representative list of issuers in capital goods sector covered by Fitch

> ABB

> Siemens AG

> Bharat Heavy Electrical

> Crompton Greaves

> Warstila

> Caterpillar

> Cummins

> Mitsubishi International Corporation

> Legrand

> Schneider Electric

> Greaves Cotton

> Premium Energy Transmission

> Indo Tech Transformers

Strong Sector Credentials – Power (Partial List below)

> Valero Energy Corp

> BP Plc

> Scottish Power

> East Coast Power

> American Electric Power Co Ltd

> Sierra Pacific resources

> Mississippi Power Company

> Energy East Corp

> New York State Electric & Gas Corp

> PSEG Power plc

> Singapore Power

> Korea Electric Power Company > Hydro Quebec

> Powergen plc

> AES Corp

> British Energy plc

> CMS Energy

> Dynergy

> Electric de France (EDF)

> Hydro Quebec

> Powergen plc

> Tata Power Trading

> Noida Power Company

> Tata Maithon Power

> Coastal Power

> Spectrum Power

> NTPC

> NHPC

> Reliance Energy

> Rural Electrification Corp

> Power Finance Corporation

> Power Trading Corp

> Malana Power Company

> Jaiprakash Hydropower> Indian Renewable Energy

Development Agency> Enercon (India) Limited*> Tamil Nadu Electricity

Board> Meghalaya State Electricity

Board> Neyvelli Lignite * Shadow/private ratings

Debt Markets

Debt Markets

> Access to Indian debt markets is restricted to AAA and AA+ rated issuers. Some investors also invest in issuers rated upto A+. Liquidity is however restricted upto AA+. Short debt market very liquid for F1+(ind) / F1(ind) rated papers

> Markets currently are awash with liquidity currently with more than INR1.2 trillion lent by banks to RBI in reverse repo

> Presented below – how market conditions have changed from Nov 08 to June 09

> November 08

– AAA spreads shot ranged between 350 to 450bps (5year papers)

– Heightened risk perception post lehman collapse

– Tight liquidity conditions

– Very few deals

– Life Insurance Corporation emerged as major investor in corporate debt paper

– Short Term 90 day CP at 13-14% for F1+(ind) rated papers

> June 09

– AAA spreads have come down and range between 150 to 175bps ( 5 year papers)

– Risk perception more rational (worst seems over)

– Easy liquidity conditions

– Increased flow of deals

– Short Term 360 day CP at 7.0-7.25% for F1+(ind) rated papers

Debt Markets

Select Market deals June 23, 2009

Issuer Fitch Rating

Residual Maturity (Approx)

Yield(% p.a) (annualized)

REC AAA 4 yr 8.14 SAIL AAA 5 yr 8.14 PFC AAA 10 yr 8.63

Fitch Ratings – An Overview

Fitch Group Overview and Market Presence

> With 49 offices worldwide, in more than 36 countries

> Rated entities in over 150 countries

> Strategic acquisitions including BankWatch, IBCA, and Duff & Phelps

> Fitch Ratings employees: 1,950 (1,061 analysts)

Fitch Ratings is a global ratings agency dedicated to providing the world’s markets with independent, timely and prospective credit opinions. Built on a foundation of organic growth and strategic acquisitions, Fitch Ratings has grown rapidly during the past decade by gaining market presence throughout the world and across all fixed income markets.

Global Presence

Mexico City

San Francisco

San Jose

San Salvador

Lima

Santiago

Bogota

ChicagoToronto

Paris

Colombo

Mumbai

Johannesburg

Tokyo

Beijing

Hong Kong

Seoul

Bangkok

Singapore

SydneyBrisbane

Taipei

New YorkMcLean

AustinTampa

Powell

La Paz

Quito

São Paulo

Rio de JaneiroBuenos Aires

Montevideo

Caracas

Frankfurt

MilanBarcelona

Tunis

Warsaw

Istanbul

Moscow

London

KolkataChennai

NewDelhi

Jakarta

Monterrey

Dubai

Branch Offices & Subsidiaries

Affiliates

Madrid

Fitch “Firsts’’ in the World

> 1922 - Introduced the world famous AAA rating scale

> 1971 - Introduced ‘+’ and ‘–’ modifiers

> Introduced the individual rating on banks

> Introduced the support rating on banks

> Introduced Pre-sale research reports on transactions before they closed, to help investors make their decisions

> Consistently leads the field in creating criteria for new asset classes

Worldwide Market Presence

> 5,990 Financial Institutions> 3,231 banks> 2,294 insurance companies > 259 managed funds> 99 covered bonds> 69 finance & leasing companies> 38 broker-dealers and asset managers

> 1,716 Corporate ratings

> 105 Sovereign ratings

> 199 Sub-sovereign Ratings

> 340 Global Infrastructure Ratings

> 45,766 U.S. municipal transactions

> 8,925 Structured finance deals

Sovereign, Financial Institutions, Corporates & Municipals

Source: Fitch Ratings as of 31 March 2009

Ratings Coverage in Asia-Pacific

Number of ratings assigned

Sovereigns 17Banks, Securities & Finance companies

334

Insurance companies 65Corporates 491CDOs 136ABS/MBS 883Public Finance & Project Finance entities 112

Bond Funds & Asset Management 15Total 2,053

As of 31 Mar 2009

In Asia Pacific, Fitch has assigned over 2,000 ratings to a broad cross section of issuers which represents in depth coverage across the credit spectrum

Fitch Ratings Market ShareBy Issuance USD Volume

53%

65% 64%

100%

65%

53%

67% 67%

95%

66%

55%

90%

74%

60%

91%

69%

54%

87%

78%

59%

92%

71%

89% 89%

0%

20%

40%

60%

80%

100%

Structured Finance FinancialInstitutions

Non-FinancialCorporates

US Public Finance Sovereigns Total Market Share

FY 2005 FY 2006 FY 2007 FY 2008

Fitch Ratings: Institutionalized Major bond indices which have incorporated Fitch

Asia Pacific Indices:> Merrill Lynch Asia Dollar Bond Index (ADOL)

> The HSBC Asian Dollar Bond Index (ADBI)

> JPMorgan Asia Credit Index (JACI)

> DBS Pan-Asian Local Currency Sovereign Index (DBS-Pals)

> Australian UBS Bond Index

> iTraxx Asia ex-Japan Index

> iTraxx Australia CSS Index

> iTraxx Credit Japan

Global Indices: > Merrill Lynch’s Global Family of Indices

> Lehman Brothers’ Global Family of Indices

> iBoxx Family of Indices which include:

> iBoxx ABF Indices

> iBoxx USD Bond Indices

> iBoxx European Bond Index

> iBoxx Euro High Yield Index

> Banc of America Securities Broad Market Indices

> The Bond Buyer Indexes

> Lehman Munipal Bond Index

> NASD Bloomberg Corporate Bond Indices

> UBS Bond Index

> iTraxx Credit Default Swap Indices

> DJ CDX Indices / CDX IndexCo Indices

Fitch Ratings: Institutionalized (cont’d)

> Trading and Research Platforms

> Ratings Delivery Service to All Major Institutional Investors and Development Banks (2003-2004)

> MarketAxess Institutional Bond Trading Platform (2003)

> Ongoing Initiatives: Incorporation of Fitch Ratings on the Sell Side Grids, Ratings Feeds of All Major Investment Banks

> Regulators

> Securities and Exchange Commission – Nationally Recognized Statistical Rating Organization (NRSRO) Designation (1975)

> Asian Central Banks- Included as a recognised agency by Hong Kong Government under the Trustee Ordinance (Cap.29)

> Investment Guidelines

> CalPers incorporates Fitch Ratings into its Fixed Income Investment Guidelines, Alongside S&P and Moody’s (2004)

> Top 100 Fixed Income Institutional Investors

Fitch Ratings in India

Fitch Ratings India Pvt Ltd., is a wholly owned subsidiary of Fitch Ratings. Fitch Ratings has a strong analytical presence in five offices in India located in Mumbai, Delhi, Chennai Bangalore and Kolkata.

Fitch Ratings India is recognised by the Reserve Bank of India, the Securities and Exchange Board of India and National Housing Bank.

The office is licensed by the Securities Exchange Board of India (SEBI) to assign national or local ratings.

Fitch Ratings currently maintains coverage of 63 financial institutions in India including banks and insurance companies. Additionally, the agency currently rates over 250 corporate issuers maintains surveillance on over 174 Indian structured finance transactions.

Fitch Ratings’ actions impact and move markets.

Fitch Ratings has integrated international best practice with local market knowledge.

Innovation : Fitch Firsts in India

> First to rate a Life insurance company in India

> First to rate an airport in India

> First to rate an Ultra Mega Power Project (UMPP) project

> First to introduce support and individual rating for banks

> First to introduce outlook for all ratings

> First ABS transaction to be rated on both domestic and international rating scale

> First to introduce transparency in rating process

– First to publish exposure draft on number of criteria/methodologies

> First to introduce Pre-sale reports in structured finance market

India : Credit Analysis ReportsThorough and Timely Research by Fitch Analyst

Sovereign:Credit Update on IndiaFebruary 2009

Corporate: Credit Analysis on Tata Steel LimitedJuly 2007

Bank: Credit Analysis on Export Import Bank of IndiaMarch 2008

Institutional Recognition in India

> Recognized by RBI, SEBI & NHB

> Recognized as External Credit Assessment Institution (ECAI) by RBI for rating bank facilities under Basel-2 guidelines

> Memorandum of Understanding for use of ratings by all major banks under Basel-2 framework

> Extensively engaged with Ministry of Urban Development for rating of Urban Local Bodies in JNNURM cities

> Extensively engaged with Ministry of Finance for grading of Public-Private Partnership (PPP) projects under World Bank program

Investor Development Programme Dedicated team at Fitch Ratings who focus their efforts on outreach initiatives

with credit decision makers and fixed income investors.

Intensive dialogue with capital market participants to ensure that feedback and needs of capital markets are proactively solicited on a regular basis.

– “Fitch Friday” – regular seminars by experts on material topics

Regular Analysts-Investors discussions and meetings

Regular roundtable discussions, seminars, webcasts and conference calls

Targeted dissemination of relevant rating actions, credit opinion and research to the Investors community.

Ease of access by capital market participants to Fitch Ratings’ local and international rating experts.

Strong Visibility with investors

> Fitch research reports have > 8,100 direct subscribers

– Captive audience of 8100 institutions with > 17,000 Investors

– 44 of the top 50 European Investors either subscribe to or have accessed Fitch's website in the past 12 months

– 19 of the top 20 European Investors either subscribe to or have accessed Fitch’s website in the past 12 months

– Majority of US top 100 Investors are subscribers

– 86% of Top 100 Investors in Asia Pacific Region use Fitch research

Fixed Income Investors in Fitch Ratings’ Investor

Development Programme (Selected US Investors)

Fixed Income Investors in Fitch Ratings’ Investor

Development Programme (Selected European Investors)

Fixed Income Investors in Fitch Ratings’ Investor Development Programme (Selected Asia Pacific ex Japan Investors)

Fixed Income Investors in Fitch Ratings’ Investor

Development Programme (Selected Japan Investors)

Fitch Clients: Select Corporates

Reliance Industries

      

        

        

Fitch Clients: Select Banks and FIs, Securitization

IDBI

Recent Additions

COASTAL GUJARAT POWER LIMITED

Appendix B – Fitch’s Rating Scale

Fitch’s Investment Grade Ratings Scale

F1+

F1

F2

F3

Short Term Rating Long Term Rating

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

Fitch Ratings

www.fitchratings.com

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Fitch Ratings India

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