ICRA Reaffirms LAA and A1 Plus Ratings for NCD of Tata Power
OREANDA-NEWS. March 17, 2011. Tata Power, India’s largest integrated private power utility, today, said that rating agency ICRA has reaffirmed LAA and A1plus ratings assigned for Tata Power’s non-convertible debenture (NCD) programme of Rs2,600 crore and commercial paper / short-term debt programme of Rs500 crore. The long-term rating carries a positive outlook.
The reaffirmation of ratings by ICRA takes into account the significant progress achieved in execution of the
The ratings also factor in the continued satisfactory operational and financial performance of coal operating companies in
While commenting on the high debt levels on a consolidated basis, ICRA said that, most of the debt is ‘non-recourse’ in nature and is on the books of the subsidiaries. Besides, the existing debt on Tata Power’s books has long maturity. The company’s established track record across the value chain in the power sector provides comfort from the credit perspective, it added. It also said that the ratings are, however, constrained by the continued but reduced execution risks, time and cost overruns, in the ongoing projects, the changing business risk profile of the company with increasingly larger share likely to accrue from the non-regulated businesses and the high debt levels on a consolidated basis. ICRA also notes that the company is considering large expansion plans on its own books, through the same are currently in nascent stages and hence, timing and funding plans for the same remain key sensitivities.
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