S&P affirms National Hydroelectric Power

Standard & Poor's said it affirmed its BB+ corporate credit rating for India's National Hydroelectric Power Corp. Ltd.

The outlook is stable.

The utility is wholly owned by the government of India (BB+/stable/B). The credit quality of National Hydroelectric is closely linked to the sovereign because of the high priority given to the hydroelectric sector by the government of India.

S&P said the ratings are constrained by weak credit quality of its customers, the government-owned electric utilities in India. These state utilities consistently report operating losses and often face cash flow difficulties, S&P said. The ratings also are constrained by an aggressive financial policy and a weak cash flow due to high debt level, S&P said.

The ratings are supported by financial support from the government of India. The company is the largest beneficiary of government electricity funding with 57% of planned total outlay for the power sector being allocated to National Hydroelectric. The ratings also are supported by favorable regulatory structure, which insulates it from risks in demand and water availability, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.