MUMBAI: Moody's Investors Service has assigned Baa2 rating, with a negative outlook, to Adani Transmission’s 30-year dollar backed senior secured bonds, part of a $400 million bond refinancing programme.
The senior secured bonds comprise Series A bonds of $310 million and Series B bonds of $90 million.
The issue is by Adani Transmission Ltd Restricted Group (ATL RG), which includes seven wholly owned subsidiaries -- Raipur-Rajnandgaon-Warora Transmission Limited, Sipat Transmission Limited, Chhattisgarh-WR Transmission Ltd, Hadoti Power Transmission Service Limited, Barmer Power Transmission Service Ltd, Thar Power Transmission Service Ltd and Adani Transmission (Rajasthan) Ltd.
The subsidiaries will use the proceeds primarily to repay existing third party senior lenders and loans from related parties.
Moody’s said, “The Baa2 rating on the USD bonds reflects the credit quality of ATL RG, which is in turn supported by its stable revenues from a diversified set of transmission assets in India that operate under long-term transmission service agreements with set tariffs. The rating also benefits from the transmission assets' solid operating track record across ATL RG and the broader Adani Transmission portfolio, and its fixed-cost amortizing debt structure, which further enhances visibility over the group's cash flow."
The negative outlook reflects that ATL RG's operations are based entirely in India and as such, a change in the sovereign rating will likely result in a corresponding downgrade of ATL RG's Baa2 bond ratings. An upgrade is unlikely, given the negative outlook.
"The outlook on the rating can return to stable if the outlook on India's sovereign rating changes to stable from negative, and if the RG maintains a solid operating performance consistent with Moody's base case expectations," the agency said.