India Ratings and Research (Ind-Ra) has assigned Adani Ports and Special Economic Zone (APSEZL) Rs 30 billion commercial paper (CP) programme a rating of 'IND A1+'. The agency also maintains a long-term issuer rating of ‘IND AA+’ with stable outlook on APSEZL.

The CP issue is part of the company's debt refinancing strategy to reduce borrowing costs, and therefore is not likely to result in any increase in total debt levels. The rated CP issue is not part of any other commercial paper programme issued by APSEZL.

The issue of CP is also likely to be an interim measure adopted by the company. APSEZL could opt for non-convertible debentures or any other form of debt issuance at possibly lower coupon rates than for the existing bank loans to refinance the major portion of its debt in few years.

The agency has taken a consolidated view of APSEZL and its subsidiaries. The rating is driven by APSEZL's strong business profile which is likely to translate into a steady improvement of its financial profile in the next three years.

The financial profile is characterised by high leverage (net adjusted debt/EBITDA) due to the large debt taken for capex till date. The company has start generating revenue from the added capacity from FY15.