Fitch Ratings has assigned India-based Power Finance Corporation Limited's (PFC, BBB-/Negative) proposed Regulation S senior unsecured notes a rating of 'BBB-'.

The notes will be issued from PFC's existing USD5.0 billion global medium-term note programme. The net proceeds will be used in accordance with the approvals granted by the Reserve Bank of India from time to time or in accordance with the ECB guidelines or as may be stated in the applicable pricing supplement.

The rating is contingent upon the receipt of final documents conforming to information already received and details regarding the amount, coupon rate and maturity.

KEY RATING DRIVERS

The programme rating is aligned with PFC's Issuer Default Rating (IDR) on the basis that the notes issued under the programme will constitute direct, unconditional and unsecured obligations of PFC and rank pari passu with all its other present and future outstanding unsecured and unsubordinated obligations.

DERIVATION SUMMARY

Fitch classifies PFC as a government-related entity (GRE) under our Government-Related Entities Rating Criteria with a high overall support score of 50. We believe it has strong linkages with the state in light of the company's strategic role in supporting India's power sector and the government's incentive to provide extraordinary support to PFC, if needed. The company's IDR remains equalised with that of the Indian sovereign (BBB-/Negative), based on the GRE scoring and Fitch's assessment of PFC's Standalone Credit Profile (SCP).

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Revision of the Negative Outlook on the sovereign rating to Stable could lead to the Outlook on PFC being changed to Stable from Negative.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

A weakening of the sponsor's incentive to support PFC or weakened links with the sponsor, resulting in an overall support score below 45, combined with a deterioration of the SCP, could result in a downgrade in the company's IDR;

Negative rating action on PFC's IDR would result in similar action on the ratings of the programme and the rated notes.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579].

DATE OF RELEVANT COMMITTEE

23 June 2020

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS PFC's ratings are credit-linked to the Indian sovereign ratings.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg

RATING ACTIONS

ENTITY/DEBT	RATING

Power Finance Corporation Limited

senior unsecured

LT	BBB- 	New Rating

VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

(C) 2021 Electronic News Publishing, source ENP Newswire