Moody’s downgrades Tata Power to negative

Moody's Investors Service downgraded Tata Power ratings to negative from stable after the company signed a share purchase agreement to buy Welspun Renewables Energy Limited (Welspun) for Rs.9,250 crore in cash. “The change in outlook to negative reflects the combined effect of entirely debt-funded nature of the transaction, which cuts headroom within the ratings and uncertainty on the terms and structure of the bank debt that will be raised to fund the acquisition,” said Abhishek Tyagi, Moody's Vice President and Senior Analyst. Limited details were available on quality of the assets being acquired, he said.