REUTERS - Some Indian companies could see the quality of their debt decline as higher global borrowing costs and a sharply weaker rupee take their toll, Moody's Investors Service said on Thursday.
Companies such as Indian Oil Corp
"We believe they will be able to refinance their maturing debt, but possibly at higher credit spreads than on existing debt," the agency said.
But while the rupee has slumped as much as 20 percent this year, it said rated Indian non-financial companies should be able to meet their $32.8 billion in debt coming due through March 2014, more than half of which is denominated in foreign currency, as they will continue to have access to offshore and onshore funding sources.
State-run companies Oil and Natural Gas Corp
The agency said that as domestic interest rates are also rising most companies will face higher borrowing costs after refinancing of existing debt.
(Writing by Ranjit Gangadharan in Mumbai; Editing by Edwina Gibbs)