Ahmedabad, January 15 (IANS). Moody’s Ratings on Thursday upgraded the outlook on Adani Ports and Special Economic Zone (APSEZ) to stable from negative. Also, the investment grade rating has been maintained at ‘Baa3’. This reflects the strong financial position of APSEZ.
Moody’s Ratings has maintained the Baa3 senior secured ratings for Adani Transmission Step-One Limited (ATSOL) and Adani Electricity Mumbai Limited (AEML). Additionally, the ‘(P)Baa3 Senior Secured MTN Program Ratings’ for AEML have also been retained.
The global brokerage firm said APSEZ will maintain strong access to liquidity and a credit profile in line with its Baa3 rating over the next 12-18 months.
“The strong financial position of APSEZ is supported by the discretionary nature of the capital expenditure planned for development and access to financing,” the rating agency said.
The global brokerage firm said it has changed its outlook on all ratings to stable from negative.
“This decision to stabilize the outlook reflects our expectation that ATSL and AEML will maintain liquidity and credit profiles consistent with their investable ratings over the next 12-18 months,” the foundation said in its note.
Explaining the rationale behind the rating upgrade, the brokerage firm said the affirmation of ATSL’s senior secured bond ratings reflects the company’s strong credit relationship with its wholly owned parent company Adani Energy Solutions Limited (AESL), as the rated bonds are guaranteed by AESL and comply with AESL’s insolvency related default provisions.
“AESL’s credit profile reflects its diverse portfolio of quality transmission and distribution assets, which benefit from supportive regulatory regimes or long-term contracts with fixed tariffs,” it said.
“Over the next one to two years, we expect AESL’s funds from operations (FFO)/net debt ratio to remain slightly above the minimum tolerance level of 7.5 per cent, as additional debt will be required to meet its large capex. The direction of AESL’s parameters will also depend on the actual timing of capex and associated loan acquisitions,” Moody’s Ratings said.
The brokerage firm further said that the affirmation of AEML’s senior secured bond ratings reflects the expected revenues from its regulated utility business in Mumbai.
“We expect AEML to achieve a figure of 10.5 per cent to 11.5 per cent before working capital/debt on a cash flow from operations (CFO) basis over the next one to two years,” the note said.
–IANS
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