Moody's has assigned the stable Ba3 rating to the senior secured USD notes issued by Neerg Energy Ltd to the senior secured notes issued by Neerg Energy.
"We have assigned a first-time Ba3 rating to the senior secured USD notes issued by Neerg Energy Ltd (the Issuer). The rating outlook is stable," the rating agency said in a statement.
According to the statement, the issuer's credit quality is closely linked to that of the seven operating companies that together form the restricted group, which in turn is owned by Renew Power Ventures Pvt Ltd (RPVPL, unrated) - Such linkage is established because Neerg will be the holder of Masala bonds that will be issued by the companies within the restricted group and supported by cash flows from the restricted group.
Holders of the USD notes that was issued by Neerg have a first ranking charge over the Masala bonds. On February 7 2017, Neerg has issued USD 475 million, which includes a slight top-up on the amount previously estimated for the issuance, it said.
While this decreases the amount of headroom, it is manageable within the Ba3 rating. The Ba3 rating is underpinned by a diverse set of long-term contracts that provide stable cash flows, have low operating risks and are comprised predominantly of wind and solar energy projects, it said.
The restricted group's cash flows draw from 12 different projects spread across five states in India.
Neerg Energy Ltd, which is the issuer of the senior secured USD notes, is held by a trust and its ownership is not linked to RPVPL or its subsidiaries.
Using the proceeds from the USD notes issuance, Neerg will subscribe to the Masala bonds issued by the specified seven operating entities of RPVPL and which together form the restricted group.
The seven restricted subsidiaries have a capacity of 504 MW in wind and solar power plants and are domiciled in India.
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