TEXT-Fitch rates NTPC's proposed USD notes 'BBB-(EXP)'

Mon Sep 24, 2012 3:05am EDT

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(The following statement was released by the rating agency)

Sept 24 - Fitch Ratings has assigned India-based NTPC Limited's (NTPC, 'BBB'/Negative) proposed notes an expected rating of 'BBB-(EXP)'. The notes are to be issued out of its USD2bn (upsized from USD1bn previously) medium-term note programme.

The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of NTPC. The final rating is contingent upon the receipt of final documents conforming to information already received.

NTPC's ratings reflect its position as India's largest independent power generator. They also reflect its robust business model with low off-take risks, due to power deficit in the country and long-term power purchase agreements with state power utilities (SPUs) with pass through of reasonable costs and timely payment collections.

The ratings further benefit from NTPC's financial flexibility due to its strong cash flows, a large cash balance (INR161.5bn) and ability to access capital markets. NTPC's ratings are currently constrained by that of India ('BBB-'/ Negative) given the 84.5% government ownership.

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