TRIS Rating affirms “A” score for Nam Ngum 2 Power

It also assigned a rating of “A” to NN2PC’s proposed issues of up to Bt6 billion in senior unsecured debentures. The proceeds from the proposed debenture issuance will be used to pay off outstanding project loans.
TRIS Rating has also upgraded the rating of NN2PC’s outstanding senior unsecured debentures to “A” from “A-”. The upgrade follows a full repayment of project loans, which resulted in the discharge of respective security to the lenders, including its first-rank mortgages on project assets. This eased thee disadvantage for unsecured creditors.
The ratings reflect the company’s solid contractual framework, reliable cash flows received from a long-term power purchase agreement (PPA) with the Electricity Generating Authority of Thailand (EGAT – rated “AAA” by TRIS Rating), an experienced management team and proven technology used in the hydroelectric power plant. However, the ratings are constrained by the uncertain flow of water from the Nam Ngum river and the sovereign risk of the Laos, which was rated “BBB+/Negative” by TRIS Rating.