Nam Ngum 2 Power rating at ‘A’ ahead of debenture issue
Tris Rating has affirmed the rating of Nam Ngum 2 Power Co at “A” and assigned the rating of “A-” to the company’s proposed issue of up to Bt6 billion in senior debentures.
The one notch below the company rating reflects the structural subordination of the proposed debentures, compared with existing loans from banks.
The proceeds from the issue will be used for refinancing part of its project loans.
The ratings reflect the stable cashflows the company receives from the long-term power purchase agreement with the Electricity Generating Authority of Thailand, rated “AAA”, and the experience of its shareholders and management in operating hydroelectric plants.
The ratings also take into consideration the structural protection embedded in the project contracts and the proven technology used in its hydropower plant.
The ratings are constrained by the unpredictability of the flow of the Nam Ngum River and the sovereign risk of Laos, rated “BBB+/Negative”, where the plant is located.
