JSW Energy gains 9% as Moody's, Fitch assign credit ratings to arm notes

Shares of JSW Energy hit a fresh 52-week high of Rs 120.35, up 9 per cent on the BSE, in the intra-day trade on Wednesday on the back of a two-fold jump in trading volumes after global rating agencies Moody's Investors Service and Fitch Ratings assigned long-term ratings to the JSW Energy's wholly-owned subsidiary, JSW Hydro Energy Limited with stable outlook. The rating has been assigned to JSW Hydro Energy Limited's proposed US-dollar senior secured notes due 2031.

The stock of the electric utilities company surpassed its previous high of Rs 116 touched on May 4. Menawhile it had hit an all-time high of Rs 136 on September 6, 2010. At 02:11 pm, JSW Energy shares were trading 7 per cent higher at Rs 117.95 on the BSE, as compared to a 0.47 per cent rise in the S&P BSE Sensex. A combined around 22 million equity shares had changed hands on the NSE and BSE till the time of writing of this report.

"The proposed notes will be issued directly by JSW Hydro to primarily repay its existing indebtedness on its two operational hydro projects; the 1000MW Karcham Wangtoo (KW) on the Satluj River and 300MW Baspa II (B2) hydro power plants on the Baspa river, both located in the Indian state of Himachal Pradesh. The final rating is contingent upon the receipt by Fitch of final documents conforming to information already received," Fitch Ratings said in its rating action commentary.

The rating further reflects the credit quality of the portfolio of two hydro power projects, supported by KW's contracted revenue with PTC India Limited (PTC) and B2's contracted revenue with the Himachal Pradesh State Electricity Board Limited (HPSEBL). "The rating is constrained at 'BB+' due to uncertainty around debt refinancing and the systemic risk stemming from the ultimate exposure to state-owned power-distribution companies, even though the financial profile is better than the 'BBB-' threshold", the agency said. CLICK HERE FOR FULL DETAILS.

Meanwhile, JSW Energy on May 3, announced that JSW Renew Energy, wholly owned subsidiary of JSW Future Energy, has signed a power purchase agreement with the Solar Energy Corporation of India or SECI for 540 megawatt (MW) of wind-based electricity. This is the single largest power purchase agreement for the wind/blended wind category in the industry, and also marks the foray of the company into the wind or blended wind energy generation segment, the company said. JSW Future Energy is 100 per cent subsidiary of JSW Energy.