Moody's upgrades Tata Power rating from negative to stable

Moody's Investors Service, changed the outlook for Tata Power's Ba3 corporate family rating and B1 senior unsecured bond ratings to ‘stable’ from ‘negative’.

"The change in outlook to stable from negative primarily reflects the progress in successfully executing the company's expansion plan", says Ivan Palacios, a Moody's AVP/analyst and lead analyst for Tata Power.

Despite the execution risks raised by its expansion plan, Moody's derives comfort from the fact that construction works have already started and funding arrangements and fuel linkages have been put in place. All of the company's investments in developing new generation projects are expected to be managed fairly conservatively including the existence of long term off-take arrangements for most of the electric output from those generation assets, which should produce fairly predictable cash flows.