S&P rates Adani Transmission notes BBB-

S&P said it assigned a preliminary BBB- long-term issue rating to the proposed dollar-denominated senior secured notes by Adani Transmission Ltd.

The notes will rank equally with the company’s other present and future secured and unsubordinated obligations.

Adani Transmission intends to use the proceeds to mainly refinance its existing debt at the obligor group.

The obligor group comprises Adani and its two 100%-owned operating subsidiaries, Adani Transmission (India) Ltd. and Maharashtra Eastern Grid Power Transmission Co. Ltd.

The agency said it believes the company will hedge at least 95% of its foreign-currency debt within a short period after the bond, in line with its common terms deed.

The rating reflects expectations that the company will have stable cash flows, driven by a favorable regulatory environment and good operating record, S&P said.

However, the company is dependent on two key assets, exposed to somewhat weak counterparties and has a short track record of operations, the agency said.

The rating also considers an expectation that Adani’s growth aspirations will be moderated by the company’s legal and management commitment to limit the investment and support to new projects, S&P added.

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