S&P assigns BBB- to Power Grid's medium-term notes programme

S&P Global Ratings today assigned long-term issue rating of BBB- to state-run Power Grid Corporation of India's proposed USD 1 billion senior unsecured medium-term notes programme.
The rating is subject to the agency's review of the final issuance documentation, S&P said in a statement.
"The rating on Power Grid reflects the company's supportive regulatory framework, near monopoly in interstate transmission, and stable margins and cash flows. Power Grid's large capital spending plans and exposure to the weak credit profiles of state electricity boards offset these strengths," it said.
The stable outlook on Power Grid, it said, reflects S&P's expectation that the company will manage its growth and project execution risks such that it maintains its ratio of funds from operations to debt at about nine per cent over the next 12-18 months.

"The rating and outlook on Power Grid will move in tandem with the sovereign credit rating on India (BBB-/Stable/A-3)," the statement added.