S&P affirms Adani International Container Terminal's issue rating at 'BBB-'

Standard and Poor’s (S&P) has affirmed Adani International Container Terminal Pte Ltd’s (AICTPL’s) issue rating at “BBB-”. This comes as revision in norms does not affect the credit profile of the entity.

On December 14, 2022, S&P Global Ratings had published revised criteria for rating project finance transactions. The criteria update does not affect our assessment of the credit profile of AICTPL, the rating agency said in a statement.

Mundra-based AICTPL is a 50:50 joint venture between Adani Ports and Special Economic Zone (APSEZ) and Terminal Investment (TIL). 

AICTPL is a container terminal operator in Gujarat. The joint venture was formed in 2011.

TIL, the sixth-largest container terminal operator worldwide, is majority owned by Switzerland-based Mediterranean Shipping Co. SA (MSC). It is the largest shipping liner in the world.

S&P said AICTPL’s debt is fully secured and has cash flow waterfalls that prioritise operating expenditure and debt service over distributions. Given the ring-fenced assets, the structure sufficiently protects investors. As such, AICTPL is currently not affected by the governance risks and funding challenges of the larger Adani Group.

The stable outlook on rating reflects expectation that AICTPL will maintain predictable cash flow with fully market-based pricing and volume over the next 12-24 months.

However, an upgrade is unlikely over the next 12-24 months, because the rating on AICTPL is constrained by S&P’s sovereign rating on India.

It does not expect the stand-alone credit profile (SACP) to improve, given that the overall financial metrics are constrained by the large balloon payment, S&P said.