Fitch affirms Malana Power

Fitch Ratings said it affirmed Malana Power Co. Ltd.'s national long-term rating at A-(ind), along with its Rs.986.7 million long-term bank loans at A-(ind) and Rs.250 million secured non-convertible debenture program at AAA(ind)(SO), based on an unconditional and irrevocable guarantee from Infrastructure Leasing & Financial Services Ltd., which is rated AAA(ind)/F1+(ind). The agency also said it assigned a rating of F1(ind) to the Rs.500 million short-term bank loans.

The outlook is stable.

The ratings continue to factor in the healthy operating performance of its merchant power plant and its solid earnings backed by strong tariffs for peak load merchant power, Fitch said.

rating constraints stem mainly from the increased support extended by Malana Power to its 88%-owned subsidiary, AD Hydro Power Ltd., consequent to a second cost overrun in the subsidiary's hydro power project, the agency said.

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