Fitch rates Delhi Transco program A+(ind)

Fitch Ratings said it assigned an A+(ind) national long-term rating to Delhi Transco Ltd.'s proposed Rs. 5 billion bond program and affirmed its national long-term rating, Rs. 2 billion bond program and Rs. 5 billion sanctioned long-term bank loans at A+(ind) and its Rs. 700 million non-fund-based working capital bank facility at A+(ind)/F1(ind).

The outlook is stable.

The agency said Delhi Transco's ratings continue to reflect its strong operational, financial and strategic linkages with the Government of National Capital Territory of Delhi, its position as a key vehicle in furthering that government's social and infrastructural obligations in Delhi's power sector, its monopoly status in its license area, its high operating efficiencies and low levels of business risk as well as the stable and transparent regulatory process in determining its tariff on a multi-year basis.

Rating concerns continue to emanate from Delhi Transco's Rs. 18.5 billion capex program over 2010-2012. Fitch said this program increased Delhi Transco's leverage in 2010 and is likely to stress its credit profile over the short-to-medium term though it remains consistent with the company's overall rating category.

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