Care lowers Adani Power rating on delays in refinancing ECBs

Rating of Adani Power’s long-term bank facilities was lowered on account of delays in refinancing of its external commercial borrowings


A plant of Adani Power.
A plant of Adani Power.

New Delhi: Ratings agency Credit Analysis & Research Ltd (Care) has lowered by a notch its rating of Adani Power Ltd’s long-term bank facilities on account of delays in refinancing of its external commercial borrowings (ECBs) and consequent adverse impact on its debt coverage indicators.

“Credit Analysis & Research Ltd (Care) has revised its ratings... for long-term bank facilities (rupee term loan-phase IV) from Care A- to Care BBB+,” Adani Power said in a filing to BSE.

Care BBB+ rating corresponds to investment grade. Care Ratings has also revised its ratings for other long-term bank facilities, from BBB to BBB-.

“The reasons as stated by rating agency for such revised/downward rating (are)... delay in refinancing of its external commercial borrowings (ECBs) than previously envisaged and consequent adverse impact on its debt coverage indicators,” the filing said.

The revision was also on account of “impact on liquidity with significant build-up of receivables pertaining to compensatory tariff (CT) in its fixed price power purchase agreement (PPAs) upon substantial delay in resolution of its dispute related to CT with power off-takers.”

Instruments with this grade are considered to have a moderate degree of safety on timely servicing of financial obligations and carry moderate credit risks.

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