Fitch rates Jorbat Shillong debt BBB(ind)

Fitch Ratings said it assigned Jorbat Shillong Expressway Ltd.'s Rs.7 billion senior long-term rupee loans a BBB+(ind) rating, along with a BBB(ind) rating to the company's Rs. 400 million subordinated debt.

The outlook is stable.

The subordinated debt rating is one notch lower than the senior debt rating given weaker security features, including lower ranking in the payment waterfall and debt service coverage, the agency said.

Jorbat Shillong is a special purpose vehicle, promoted by IL&FS Transportation Networks Ltd. and Ramky Infrastructure Ltd. to implement a lane expansion project under the build-operate-transfer annuity model, Fitch said.

Jorbat's credit profile is driven primarily by the contracted, fixed availability-based annuity payments from the government-owned counterparty, National Highways Authority of India, which substantially mitigates revenue risk, the agency said.

Although the concession stipulates performance deductions in annuity payments, the performance deductions are passed down to the operation and maintenance contractor, Fitch said.

The ratings also are supported by explicit undertaking from the sponsors to fund any cost overruns in the project and to arrange for additional funding should internal cash accruals be insufficient to fund major maintenance expenditure, the agency added.

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