Fitch Ratings has assigned Power Finance Corporation's (PFC's) proposed Regulation S senior unsecured euro green bond a rating of BBB-minus.
The proposed bond will be issued from PFC's existing global medium-term note programme. The net proceeds of the bond will be lent to eligible green projects in accordance with the company's green bond framework.
The programme size was raised to USD 8 billion in August from USD 5 billion previously. The increase did not affect the programme's BBB-minus rating which was last affirmed on May 26.
Fitch said both the programme and the bond rating are aligned with PFC's issuer default rating as the bond will constitute direct, unconditional, unsubordinated and unsecured obligation of PFC and will rank pari passu with all of the company's other present and future outstanding unsecured and unsubordinated obligations.
Fitch classifies PFC as a government-related entity under its government-related entities rating criteria with a high overall support score of 50.
It said PFC has strong state linkages in light of its strategic role in supporting India's power sector and the government's incentive to provide extraordinary support to PFC if needed.
The company's issuer default rating is equalised with that of Indian sovereign based on the government-related entity scoring and irrespective of Fitch's assessment of PFC's standalone credit profile.
PFC was established in 1986 as a non-banking financial company. It is registered with the Reserve Bank of India and is under administrative control of the Ministry of Power.
PFC is responsible for lending to the power sector, primarily to government-sector borrowers.
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