The bond rating is the same as JSW's Ba2 corporate family rating (CFR) and the Ba2 rating on the company's existing senior unsecured notes.
The proposed bonds rank pari-passu to the company's existing senior unsecured notes.
JSW's Ba2 CFR reflects the company's large scale, strong market shares in West and South India, and competitive conversion costs, with the last factor supported by the company's wide range of furnace technologies and the coastal locations of its operations.
The proposed bonds will rank pari-passu to the company's $500 million senior unsecured bonds maturing in November 2019 and the $500 million senior unsecured bonds maturing in April 2022.
The bond issuing entity has significant operations, along with its role as the holding company for the group -- as such there is no structural subordination for the bondholders.
The improving split between secured and unsecured debt in JSW's capital structure results in the unsecured bonds being rated at the same level as the CFR.
As at December 2017, secured debt constituted 53% of total debt, down from 71% in March 2014. With the proposed bond issuance, Moody's expects that the proportion of secured debt to total debt will fall further.
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