Fitch rates Neelachal Ispat Nigam debt AA-(ind)(SO)

Fitch Ratings said it assigned Neelachal Ispat Nigam Ltd. an expected AA-(ind)(SO) national rating to its secured, non-convertible debenture program of Rs.2 billion, including a green shoe option of Rs.1 billion.

The outlook is stable.

The expected rating is based solely on the unconditional and irrevocable corporate guarantee provided by MMTC Ltd. The rating also takes into account the financial structure of the transaction that ensures timely payments, Fitch said.

The rating also reflects the guarantor's position as India's largest international trading house, its part-advanced deposit based transaction model, diverse product portfolio and majority shareholding by the government of India, the agency said.

Rating constraints are in the form of MMTC's low sustained EBIDTA margins - a large part of its revenues is derived from bullion trading, which is exposed to commodity and currency risks, Fitch said.

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