Moody's assigns investment grade rating to IREDA's masala bond

Moody's Investors Service has assigned an investment grade rating to state-owned Indian Renewable Energy Development Agency Ltd's (IREDA) USD 300 million masala bond programme.

"Moody's Investors Service has assigned a Baa3 rating to Indian Renewable IREDA's USD 300 million equivalent Indian rupee-denominated senior unsecured bonds (the so-called IREDA Green Masala Bond)," the rating agency said in a release.

The bonds issued medium term note (MTN) programme will be listed on the London Stock Exchange (ISM) and the Singapore Exchange (SGX-ST).

The rating outlook is stable, the ratings firm said.

On the ratings rationale, it said company's standalone credit profile comes from it being the nodal agency to implement government's renewable energy initiatives Continued support from the government, stable funding and liquidity profile with long-tenure borrowings from multilateral agencies guaranteed by government also favours.

However, unseasoned nature of company's lending book could constrain strength of the company, Moody's said.

A large portion of loan looks is untested with 67 per cent of the outstanding loans originating in last two years, it said.

Assets of the company as on March 31, 2017 were Rs 1.87 billion (USD 2.9 billion).

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