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CRISIL gives AA to Torrent Power Grid's long-term loan.

BANKING AND CREDIT NEWS-9 February 2010-CRISIL gives AA to Torrent Power Grid's long-term loan(C)1994-2010 M2 COMMUNICATIONS

9 February 2010 - Indian credit rating agency CRISIL gave a rating of AA with a "stable" outlook to the long-term loan of local Torrent Power Grid Ltd (TPGL).

The rating reflects the criticality of the transmission line being set up by TPGL to its owner, Torrent Power Ltd (BOM:532779, rated AA/"stable"/P1+ by CRISIL), and the operational, managerial, and financial support that TPGL is expected to receive from Torrent Power, owing to the strong operational linkages between the two companies. The rating also factors in the strong contractual terms of the off-take agreement between the companies, which mitigate market risk for TPGL.

These rating strengths are partially offset by TPGL's stretched capital structure because of the ongoing debt-funded capital expenditure (capex).

The "stable" outlook on TPGL's long-term loan is based on the rating outlook on Torrent Power's rated instruments. TPGL caters to Torrent Power's requirements alone.

The agency may revise the outlook to "positive" if it revises the outlook on Torrent Power's instruments to "positive". Conversely, CRISIL may revise it to "negative" in case of a similar action on the owner's rated instruments, delays in implementation of the transmission line resulting in significant cost overruns, or delays in payments from Torrent Power following commencement of operations.

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Publication:M2 Banking & Credit News (BCN)
Date:Feb 9, 2010
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