Moody's assigns Ba2 rating to Adani Abbot Point Terminal

Moody's Investors Service has today affirmed Adani Abbot Point Terminal Pty (AAPT) Ba2 rating and stressed that the outlook remains negative.
"The Ba2 ratings are supported by the take-or-pay contractual arrangements with AAPT's coal mining counterparties, with the contracts providing for the socialisation of lost revenue in the event of counterparty default or contract termination," Moody's Senior Vice President Arnon Musiker said in a statement.
Such a provision represents an important source of financial flexibility, given AAPT's high financial leverage, the statement said.
The Ba2 ratings also reflect AAPT's indirect exposure to coal commodity risk, although such risk has reduced over the past several months, with mining counterparties experiencing better cash margins, owing mainly to more favourable coal prices compared to a year ago.

"The negative outlook primarily reflects the challenging nature of the debt refinancing task facing the company over the next 12 to 18 months, with around AUD 977 million of debt - representing around 70 per cent of total debt - maturing in November 2018," Musiker added.
AAPT is part of an obligor group that has economic ownership of the Abbot Point Coal Terminal in North Queensland under a 99-year lease with state-owned lessor, the North Queensland Bulk Port Authority.
Adani Ports and Special Economic Zone Limited is the ultimate holding company of the AAPT obligor group.