Fitch rates Jain notes B+

Fitch Ratings said it published a B+ long-term issuer default rating on Jain Irrigation Systems Ltd.

The agency also said it assigned an expected rating of B+ to the proposed senior unsecured dollar-denominated notes of up to $250 million issued by Jain International Trading BV with a recovery rating of RR4.

The notes will be guaranteed by Jain Irrigation and Jain International, Fitch said.

The outlook is positive.

The company said it expects to use up to $192 million of the proceeds to repay existing secured debt, the agency said, with the remaining proceeds used for general operating purposes.

The notes are rated at the same level as Jain’s senior unsecured rating as they represent unconditional, unsecured and unsubordinated obligations of the company, Fitch said.

The recovery rating of RR4 reflects an expectation that Jain’s senior unsecured creditors are likely to recover between 31% and 50% in the hypothetical event of a default.

The recovery rating also considers prior ranking claims by secured creditors within the group, as well as claims of unsecured creditors across Jain’s subsidiaries that do not guarantee the proposed notes, the agency explained.

The ratings also reflect the company’s high leverage, which is balanced by its strong business profile as a top manufacturer of micro irrigation systems, Fitch said.

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