Fitch gives Reliance Communications notes BB-

Fitch Ratings said it assigned Reliance Communications Ltd.’s (BB-, stable) proposed senior secured notes an expected rating of BB-(EXP).

Part of the proceeds will be used to fund the $173 million up-front payment for spectrum won in the March 2015 auction and the rest for capex.

The notes are rated at the same level as Reliance’s issuer default rating. Although the notes are secured, under Fitch’s methodology for "Country-Specific Treatment of Recovery Ratings," India is classed as a category D country and, as such, the ratings of senior obligations in India are generally capped at same level as the issuer default rating, even if they are secured.

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