Moody's rates Chennai Water loans BBB+(ind)

Fitch Ratings said it assigned a BBB+(ind) rating to Chennai Water Desalination Ltd.'s long-term project bank loans aggregating Rs.3,780 million, along with a BBB+(ind) rating to the non-fund based exposure aggregating Rs.153.2 million serving as performance security, executed in the form of a bank guarantee.

The outlook is stable.

The company is a special-purpose vehicle sponsored by Ivrcl Infrastructures & Projects Ltd., which is rated AA-(ind), and Befesa Construccion y Tecnologia Ambiental, SAU.

The ratings benefit from a 25-year agreement with the state-owned Chennai Metropolitan Water Supply and Sewerage Board, which is the municipal water authority exclusively responsible for water supply and sewerage services in the Chennai metropolitan area, Fitch said.

Chennai is a water-starved city and the rapid economic progress in recent years has further accentuated its water deficiency as the city aims to serve a growing population as well as rising industrial and commercial activity, the agency said.

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