Fitch rates NTPC's proposed $2-bn notes secure

Fitch Ratings has assigned BBB- rating to state-run NTPC's proposed $2 billion medium-term note programme.

The ratings of BBB- are considered secure by Fitch.

"The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of NTPC. The final rating is contingent upon the receipt of final documents conforming to information already received," Fitch said in a statement.

Fitch assesses that the linkages between NTPC and the sovereign are moderate, with strategic linkages being especially strong.

NTPC's ratings benefit from stable operational cash flows due to the favourable regulatory framework. The company has long-term power purchase agreements (PPAs) for all its plants that allow for the pass-through of fixed costs as well as fuel costs, the statement said.

Its returns are regulated based on invested capital and a rate of return as per a transparent regulatory model.

"There are no off-take risks as the fixed costs are payable if the plant has achieved the regulatory benchmark availability. There is regulatory certainty until March 2019, the latest five year regulatory tariff period," it said.