Moody's assigns definitive Ba1 rating to JSW Hydro Energy's senior notes
Jul 06, 2021
Singapore, July 6 : Moody's Investors Service said on Tuesday it has assigned a definitive Ba1 rating to JSW Hydro Energy Ltd's (JSWH) USD707 million 4.125 per cent senior secured notes due 2031.
The outlook is stable, it said.
JSWH owns and operates two run-of-river hydropower projects -- the 300-megawatt (MW) Baspa II plant and the 1,000 MW Karcham Wangtoo plant in Himachal Pradesh.
JSWH will use the proceeds from USD notes to repay its outstanding external debt.
The holders of the USD notes will benefit from a majority pledge over JSWH's shares and a first ranking pari passu charge over project accounts, movable and immovable assets and project documents, including power purchase agreements (PPAs).
Moody's said the Ba1 rating assigned to the senior notes reflects the company's predictable cash flow profile from its long-term PPAs. JSWH has a long and stable operating track record of its two hydropower projects besides very competitive tariffs for its projects.
In addition, the company has moderate financial leverage supported by structural features of the notes including a mandatory cash sweep mechanism.
Moody's said JSWH's credit profile reflects the long and efficient track record of its hydropower projects which have consistently outperformed the regulatory targets allowing the company to earn incentives and improve its cash flows.
The Ba1 rating also considers the established and consistent regulatory regime for hydropower projects in India which further improves the predictability of cash flows for the two projects.
JSWH is a wholly-owned subsidiary of JSW Energy Ltd and is the largest private hydropower producer in India.
