Fitch rates Surat-Dahisar loans BBB(ind)

Fitch Ratings said it assigned a BBB(ind) rating to IRB Surat-Dahisar Tollway Pvt Ltd.'s long-term bank loans aggregating Rs. 19.56 billion.

The outlook is stable.

The special purpose vehicle was created by IRB Infrastructure Developers Ltd., which is rated A-(ind), and Deutsche Bank for implementing a project to widen the Surat-Dahisar section of the National Highway-8. The IRB Group specializes in constructing and operating toll roads.

Among the strengths are cash flows generated by the operating toll road, most of which must be used to fund capital expenditures during the construction period, as well as the traffic flow that emanates from one of India's premier national highways, Fitch said.

Key project completion risks that constrain the rating include a sizable capital expenditure program, which is being financed through a highly leveraged capital structure, resulting in a base case expectation for only modest debt service coverage by net toll revenues, the agency said.

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