Fitch rates Adani notes BBB-

Fitch Ratings said it assigned an expected rating of BBB- on Adani Transmission Ltd.'s proposed dollar-denominated senior secured notes.

The proposed notes are rated at the same level as Adani's issuer default rating as they represent the company's direct, unconditional, unsubordinated and secured obligations, Fitch said.

Fitch also said it withdrew the BBB-(emr) expected rating assigned to the company’s proposed Indian rupee-denominated senior secured notes, which were payable in dollars.

The company does not intend to proceed with this debt issue and plans to raise the proposed dollar-denominated notes instead, the agency said.

The ratings benefit from the company’s stable and favorable regulatory environment, Fitch said.

Revenue from Adani’s transmission assets is based on cost plus tariff, providing long-term cash flow certainty and stability, the agency explained.

India's national and state regulators have a long record of delivering predictable outcomes, including tariff formulas, Fitch added.

The regulatory framework also provides some protection in recovering dues from weak customers; a problem often faced by Indian transmission companies, the agency said.

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