ICRA has assigned “LAAA” rating for the proposed Rs 10,700 crore long-term borrowing programme of Power Grid Corporation of India (PGCIL) for 2011-12. This is the highest-credit-quality rating assigned by ICRA. Meanwhile the outlook on the long-term rating is 'Stable'. Instrument rated in this category carries the lowest credit risk.
The credit rating agency has also reaffirmed the “LAAA/Stable” ratings assigned to the company’s existing long-term bonds programme aggregating Rs 26528.10 crore, long term loans of Rs 683.13 crore and fund-based bank limits under Basel II aggregating Rs 300 crore.
Further, ICRA has also reaffirmed the A1+ to the Company’s non fund based bank limits under Basel II of Rs 600 crore and working capital loan under Basel II of Rs 1450 crore. A1 rating indicates the highest-credit-quality rating assigned by ICRA to short-term debt instruments. Instruments rated in this category carry the lowest credit risk in the short term. Within this category, certain instruments are assigned the rating of A1+ to reflect their relatively stronger credit quality.
The rating action reflects the strategic role of PGCIL in the Indian power sector by way of development of inter-state transmission network and national grid management; the low level of business risks in its core operations given the near monopoly status in inter-state transmission and a cost plus transmission tariff structure; and superior operating efficiency as indicated by an availability factor of more than 99% for its transmission network.
