Standard & Poor's Ratings Services today assigned its 'BBB-' foreign currency issue rating to a proposed issue of U.S.-dollar-denominated senior unsecured notes by Indian Railway Finance Corp. The rating on the notes reflects the long-term counterparty credit rating on IRFC and is subject to our review of the final issuance documentation.

In line with its main policy mandate, IRFC intends to use the notes proceeds to acquire rolling stock, which the company will lease to the ministry of railways. The proposed notes will constitute direct, unconditional, unsecured, and unsubordinated obligations of IRFC. They shall at all times rank at par among themselves and with all other unsecured and unsubordinated obligations of the company.

The long-term issuer credit rating on IRFC is equalized with the sovereign credit rating on India to reflect Standard & Poor's opinion of an ''almost certain'' likelihood of timely and sufficient extraordinary government support to IRFC in the event of financial distress. In accordance with our criteria for government-related entities, our rating approach is based on our view of IRFC's ''critical'' role as the financing arm of the state-owned Indian Railways and ''integral'' link with its sole owner, the government of India.

The rating on IRFC incorporates strong direct government support in the form of capital injections, permission to issue tax-free bonds, and arrangements to fund debt-payment shortfalls or emergencies.