Fitch rates REC Ltd's proposed USD notes BBB-minus

Fitch Ratings has assigned REC Ltd's proposed senior unsecured notes a rating of BBB-negative.

Fitch Ratings has assigned REC Ltd's proposed senior unsecured notes a rating of BBB-negative. REC (earlier known as Rural Electrification Corporation) is a Navratna company under the administrative control of the Ministry of Power.

The proposed notes will be issued from REC's existing 7 billion dollars global medium-term note program. The net proceeds will be used for financing power projects in accordance with the approvals granted by the Reserve Bank of India and the guidelines for external commercial borrowings. Fitch said the proposed notes are rated in line with REC's long-term issuer default rating on the basis that they will be issued under REC's program.

They will constitute its direct, unconditional and unsecured obligations and rank pari passu (on equal footing) with all its other outstanding unsecured and unsubordinated obligations. Changes to the company's issuer default rating will result in a similar change to the proposed notes, said Fitch.

REC provides financial assistance to state electricity boards, state governments, power utilities, independent power producers, rural electric cooperatives and private sector utilities. Its business activities involve financing projects in complete power sector value chain: generation, transmission, distribution and renewable energy.