Singapore: Fitch Ratings on Monday assigned Clean Renewable Power (CRP) the US Dollar Senior Secured Notes proposed by Mauritius Pte Ltd for 2027 with an expected rating of BB minus and stable outlook.
The rating of the proposed Notes reflects the credit profile of a restricted group of operating units under Hero Future Energies, a subsidiary of Hero Future Energies Asia, an independent power producer in India with a portfolio of renewable energy in excess of two gigawatts of capacity, including assets under construction In progress.
CRP is a Mauritius registered financial instrument and a wholly owned subsidiary of Hero Future Energies Asia. CRP will use the proceeds of the proposed Notes to subscribe to Indian Rupee External Commercial Credit Notes (INR ECB) issued by the companies of the restricted group of companies.
The companies will use the proceeds from INR ECB bonds primarily to refinance existing debt and to repay or extend inter-company loans to the parent company and for general corporate purposes.
According to Fitch, the rating of the proposed US dollar banknotes reflects the credit quality of a portfolio of eight projects in three Indian states consisting of 273 MW solar panels (54 percent of total capacity) and 231.5 MW wind turbines (46 percent).
The rating is also backed by 46 percent of its total capacity, which is contracted with a state-owned company, Solar Energy Corporation of India (SECI), which makes on-time payments and helps offset the long payment cycle of weaker state-owned distributors.
The rating also takes into account the refinancing risk resulting from the partially amortizing structure of the bonds. The financial profile is assessed using a debt service coverage ratio (DSCR) over the refinancing period, assuming that the outstanding principal of the Notes will be refinanced by long-term amortization debt when due.
The DSCR averages 1.31x in Fitch's rating, which includes reduced energy generation, higher costs and refinancing at a higher interest rate.
“We view SECI revenue as fully contracted revenue and apply the fully contracted project threshold. SECI's credit quality does not limit the rating as we treat SECI revenue risk as a systemic risk to the sector,” said Fitch. (ANI)