OREANDA-NEWS. August 23, 2012. Tata Power, India’s largest integrated power company, announced that rating agency Credit Rating and Information Services of India (CRISIL) has assigned AA rating (with stable outlook) to its proposed issue of Rs1500 crore unsecured, listed and subordinated debentures. CRISIL has also reaffirmed its ratings on the company’s existing debt instruments and bank facilities at AA / Stable / CRISIL A1+.

CRISIL’s ratings on the bank facilities and debt instruments of Tata Power continue to reflect the company’s strong position in the electricity generation, transmission and distribution business; its stable licensee business that has regulated returns and the significant progress made by the company in its two key ongoing projects - Maithon Power Project and Mundra Ultra Mega Power Project, where the second unit has declared commercial operations. According to CRISIL, Tata Power has demonstrated strong financial flexibility through timely financial closure for its two ongoing projects, with long-term loans and raising funds through global depositary receipts, foreign currency convertible bonds, perpetual debentures, USD hybrid bonds and sale of investments. CRISIL believes that Tata Power enjoys financial flexibility by virtue of the need-based support that it will receive from the other Tata group companies and its substantial investments in these companies, which can be liquidated to meet its fund requirements.

CRISIL also believes that the strong performance of Tata Power’s Mumbai operations and coal companies will help offset the unfavourable project economics for the Mundra Project. The outlook may be revised to Positive if the tariff renegotiations for CGPL are successful and if Tata Power does not undertake any large, incremental and debt-funded capex programme without commensurate infusion of equity capital.

Credit Analysis and Research (CARE) has assigned CARE AA rating to this proposed issuance. Further, CARE has also reaffirmed its CARE AA rating assigned to perpetual debentures of the company.