Fitch rates REC notes BBB-

Fitch Ratings said it assigned an expected BBB- rating to REC Ltd.'s upcoming benchmark-sized dollar-denominated Rule 144A/Regulation S senior notes.

The bond is rated in line with REC's long-term issuer default rating and net proceeds will be used to finance projects in the Indian power-infrastructure sector, Fitch said.

The ratings are credit-linked to those of the sovereign, meaning positive or negative rating action on the sovereign would result in similar rating action on the issuer, the agency explained.

A weakening of the sponsor's incentive to support the government-related entity or weakened links with the sponsor, as manifested in a lower strategic importance, would also prompt a downgrade, Fitch said.

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