Credit rating agency Crisil has assigned its ‘AA/Positive’ rating to Tata Power's issue of Rs.1,500 crore unsecured, listed, subordinated, perpetual debentures.
Perpetual debentures are a kind of hybrid instrument, which combine features of both debt and equity. Crisil has accorded 50% equity content to this instrument. It implies that Crisil, in its analysis of Tata Power’s capital structure and financial ratios, will treat 50% of the principal amount as equity and the other half as debt.
Crisil has also reaffirmed its ratings on the company’s existing debt instruments and bank facilities at ‘AA/Positive/P1+’.
"Considering the emerging interest in such newer instruments by Indian debt market participants, Crisil has released its detailed criteria for rating of perpetual securities issued by corporate sector entities," a release from the agency said.
