S&P rates NTPC notes BB+

Standard & Poor's said it assigned a BB+ rating to the proposed $300 million 10-year medium-term notes issue by India-based NTPC Ltd. (BB+/stable). This is the first drawdown under the company's $1 billion medium-term notes program, which was rated BB+ by S&P on Feb. 14.

The company plans to use the proceeds to fund its ongoing and new capital expenditures in the power sector.

The rating on NTPC reflects its dominant market share, diversified asset portfolio and strong financial profile. Although NTPC is not expected to need direct financial support from the sovereign (BB+/stable/B), S&P said it considers the high collections on sales to financially weak SEUs to be a form of indirect support.

The ratings on NTPC are constrained by the weak credit quality of its customers, the agency said.

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