Fitch rates Meghalaya State Electricity Board bonds BBB+(ind)

Fitch Ratings said it assigned an expected long-term rating of BBB+(ind) to the Rs. 2.2 billion unsecured non-convertible bonds of Meghalaya State Electricity Board.

The rating assigned is based solely on the unconditional and irrevocable guarantee provided by the Government of Meghalaya against repayment of principal and interest, Fitch said, and is further supported by a predefined payment mechanism.

Meghalaya's own shadow rating draws strength from Meghalaya State Electricity Board's sound record of economic growth and revenue buoyancy, the agency said, as well as a good natural resource base.

However, rising debt stock, power sector investment and higher dependence on the federal government act as constraints, Fitch said.

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