Moody’s assigns Lalitpur Power notes B3

Moody’s Investors Service said it assigned a first-time provisional rating of (P)Ba3 to the proposed 10-year $750 million senior secured notes to be issued by Lalitpur Power Generation Co. Ltd. The outlook is negative.

Lalitpur will use the proceeds to repay part of its senior debt, subordinated debt and capital creditors, create a debt service reserve account and finance general corporate purposes.

“The (P)Ba3 rating on the proposed USD notes is underpinned by Lalitpur’s predictable revenue stream under its long-term power purchase agreement and the allowed pass-through of most of the costs under its terms,” said Abhishek Tyagi, a Moody’s vice president and senior analyst, in a press release.

“At the same time, the rating captures Lalitpur’s exposure to a single off-taker – Uttar Pradesh Power Corp. Ltd. (Uppcl) – which has a weak financial profile and a track record of delayed payments. Our view on Uppcl’s credit quality has factored in the likelihood of continued support from the government of Uttar Pradesh,” added Tyagi.

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