{"id":94901,"date":"2023-03-13T16:47:00","date_gmt":"2023-03-13T11:17:00","guid":{"rendered":"https:\/\/tradebrains.in\/features\/?p=94901"},"modified":"2023-03-13T16:43:50","modified_gmt":"2023-03-13T11:13:50","slug":"biz-adani-fitch-2","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-adani-fitch-2\/","title":{"rendered":"Fitch affirms &#8216;BBB-&#8216; rating of Adani Electricity Mumbai, its USD 2-billion note programme"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-855267546\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>Fitch Ratings on Monday affirmed the credit rating of Adani Electricity Mumbai, saying the Hindenburg Research report alleging governance issues at the Adani group has a limited near-term impact on the company&#8217;s cost of funding.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-3090779272\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div><p>In a statement, the rating agency said, it has affirmed the &#8216;BBB-&#8216; rating on Adani Electricity Mumbai Ltd (AEML) US dollar senior secured notes due 2030.<\/p><p>It has also affirmed AEML&#8217;s USD 2-billion global medium-term note programme and notes issued under the programme at &#8216;BBB-&#8216;.<\/p><p>&#8216;BBB&#8217; indicates investment grade rating with relatively higher credit risk.<\/p><div class=\"trade-content_5\" id=\"trade-3802450930\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>The affirmation reflects Fitch&#8217;s view that the Hindenburg report alleging governance issues at the Adani group has a limited near-term impact on AEML&#8217;s cost of funding and access at the current rating level, it stated.<\/p><p>High cash-flow visibility from regulated assets, regulator-approved capex and an adequate liquidity position with no significant debt maturity till February 2030 further support AEML&#8217;s financial flexibility, it explained.<\/p><p>&#8220;We expect AEML&#8217;s credit metrics to have adequate headroom based on our conservative rating-case assumptions,&#8221; the agency said.<\/p><p>However, &#8220;we have lowered AEML&#8217;s management and corporate governance assessment under our criteria in the ratings navigator to &#8216;bb+&#8217;,&#8221; it said.<\/p><p>Governance weaknesses at the sponsor level and other group entities, including a highly concentrated shareholding structure across group entities and aggressive debt-funded investments at some entities, can expose all Adani group-related companies to higher contagion risks than previously considered, which can affect their financial flexibility, it said.<\/p><p>&#8220;We believe these group-related risks to be lower for AEML than for Adani Transmission Limited (ATL, BBB-\/Stable), which owns 74.9 per cent of AEML, due to AEML&#8217;s legal ring-fencing as per a strict cash flow waterfall mechanism in its long-dated US dollar notes, and the presence of Qatar Investment Authority as a significant minority shareholder,&#8221; it stated.<\/p><div class=\"trade-content-10\" id=\"trade-3090216455\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>AEML&#8217;s notes with 2030 maturity and notes issued under the global medium-term note programme represent joint and several obligations of AEML and Power Distribution Service Limited (PDSL), together referred to as the obligor group, it said.<\/p><p>PDSL is a subsidiary of ATL that collects AEML&#8217;s corporate expense allocations and keeps the receipts within the obligor group for the benefit of the US dollar noteholders.<\/p><p>&#8220;We expect AEML&#8217;s EBITDA to net interest cover to remain adequate for its current ratings, averaging 2.3x over the financial year ending March 2024 (FY24) to FY26,&#8221; Fitch said.<\/p><p>However, it said, tariff regulations allow for pass-through of long-term debt funding cost increases, limiting the impact on the credit profile even in the event of rising interest costs.<\/p><p>AEML&#8217;s leverage, defined as net debt\/EBITDA, should fall below 5 times over the medium term after factoring in additional capex.<\/p><p>Fitch expects AEML&#8217;s capex to average around Rs 15.5 billion (Rs 1,550 crore) per year from FY23-FY26 (FY22: Rs 12.4 billion).<\/p><p>&#8220;We expect AEML&#8217;s additional debt funding requirements over next 12-24 months to be low at around Rs 13 billion to fund part of the capex, although AEML has flexibility to delay some of the capex in consultation with the regulator,&#8221; the rating agency said. PTI KKS HVA<\/p><div class=\"trade-after-content\" id=\"trade-2279484081\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Fitch Ratings on Monday affirmed the credit rating of Adani Electricity Mumbai, saying the Hindenburg Research report alleging governance issues at the Adani group has a limited near-term impact on the company&#8217;s cost of funding. In a statement, the rating agency said, it has affirmed the &#8216;BBB-&#8216; rating on Adani Electricity Mumbai Ltd (AEML) US [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":25385,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1696,31],"tags":[],"class_list":["post-94901","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-action","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fitch affirms &#039;BBB-&#039; rating of Adani Electricity Mumbai, its USD 2-billion note programme - Trade Brains Features<\/title>\n<meta name=\"description\" content=\"Fitch Ratings on Monday affirmed the credit rating of Adani Electricity Mumbai, saying the Hindenburg Research report alleging governance issues at the Adani group has a limited near-term impact on the company&#039;s cost of funding.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/biz-adani-fitch-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fitch affirms &#039;BBB-&#039; 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