Rating agencies Standard & Poor's and Fitch have assigned investment grade 'BBB-' corporate credit rating with stable outlook to Adani Transmission.
"Standard & Poor's Ratings Services today assigned its preliminary 'BBB-' long-term corporate credit rating to Adani Transmission Ltd (ATL). The outlook is stable," the rating agency said in a press release.
According to the statement, Standard & Poor's also assigned its preliminary 'BBB-' long-term issue rating to the company's proposed issuance of Indian rupee-denominated senior secured notes.
However, it said that the issue rating is subject to our review of the final issuance documentation.
Similarly, Fitch Ratings has published ATL's long-term foreign currency issuer default rating (IDR) of 'BBB-' saying the outlook is stable.
Fitch has assigned a Local currency IDR of 'BBB-' with a stable outlook to ATL.
According to Fitch statement, it has also assigned the company's proposed Indian rupee-denominated senior secured notes payable in US dollars an expected rating of 'BBB-(emr)(EXP)'.
"Investors should note that, while the notes provide for coupon payments and settlement in US dollar at the prevailing rupee-dollar exchange rate, this is subject to transfer and convertibility risk on exchange operations involving the Indian rupee (and thus the rating can be no higher than India's Country Ceiling, currently 'BBB-')," it said.
It said that the linkage of payments under the terms of the notes to the prevailing exchange rate means that Fitch does not regard the trustee's role in facilitating the conversion of currencies at the transaction's initiation and maturity as altering the underlying local-currency nature of the note.
Elaborating further it said that Fitch's 'emr' suffix has been applied to the local-currency rating of the notes to reflect the fact that upon maturity the investor is paid in US dollars rather than the currency of the notes.
However Fitch said that the final rating on the notes is contingent upon the receipt of final documents conforming to information already received.
Standard & Poor's said that ATL benefits from a favourable regulatory environment, good operating record, and moderate scale of operations although it is dependent on two key assets, exposed to somewhat weak counterparties, and has a short track record of operations.
It said that the stable outlook reflects our expectation that ATL's operating performance will remain stable without any significant adverse regulatory developments.
The company said in a BSE filing that it is the first private sector player to get a Global Investment Grade rating in the Indian Power Sector.
Share of ATL closed at Rs 32.95 per unit up 3.78 per cent on BSE.
Moody's Investors Service assigned a first-time
provisional (P)Baa3 rating to ATL's proposed senior secured bond, to be denominated in Indian Rupee. The outlook on the rating is stable.
"The (P)Baa3 rating primarily reflects ATL's regulated business to operate transmission lines of approx. 5,000 circuit kilometers, mostly in Central and Western regions of India", said Abhishek Tyagi, Moody's V P and Senior Analyst.
ATL will apply the proceeds of the proposed bond issuance to partially refinance existing bank loan facilities.
