Fitch Affirms Clean Renewable Power's USD 363mn Notes 'BB-' Rating

New Delhi, Apr 18 (PTI) Fitch Ratings on Thursday affirmed Hero Future Energies arm Clean Renewable Power (Mauritius) Pte Ltd's USD 363 million senior secured notes a 'BB-' rating with stable outlook.

CRP is a financing vehicle incorporated in Mauritius and a wholly-owned subsidiary of Hero Future Energies Asia Pte Ltd.

"The Clean Renewable Power (Mauritius) Pte. Ltd's (CRP) USD 363 million senior secured notes due 2027 has been affirmed at 'BB-'. The Outlook is Stable," Fitch Ratings said in a statement.

The rating reflects the credit strengths and weaknesses of a restricted group, including CRP and a portfolio of eight renewable energy projects across three states in India, collectively referred to as Hero RG1.

The operating entities are owned by Hero Future Energies Pvt Ltd, another subsidiary of Hero Future Energies Asia.

Hero Future Energies Pvt Ltd is an independent power producer in India with 1.5 GW of operating capacity and an additional 2,700 MW in various stages of implementation.

Hero RG1 has 505 MW of capacity across eight projects - three solar assets of 273 MW and five wind assets of 232 MW.

According to Fitch Ratings, the 'BB' rating indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists that supports the servicing of financial commitments.

Fitch's credit rating scale for issuers and issues is expressed using the categories 'AAA' to 'BBB' (investment grade) and 'BB' to 'D' (speculative grade) with an additional +/- for AA through CCC levels indicating relative differences of probability of default or recovery for issues.

All the projects supply off-takers, including the Solar Energy Corporation of India (SECI) and other state-owned utilities, under long-term power-purchase agreements (PPAs). SECI is contracted to buy 230 MW of Hero RG1's total capacity.

SECI is a sovereign-owned entity and usually makes timely payments, which helps offset the long payment cycle of weaker state-owned distribution companies, it said.

The rating also considers the refinancing risk arising from the partially amortising structure of the notes, it added.

CRP has used the US dollar bond proceeds to subscribe to senior secured debt (rupee-denominated external commercial borrowings) to be issued by eight SPV entities in the restricted group.

Restricted subsidiaries have used the proceeds to mainly repay existing debt and the remaining to repay shareholder loans.