## Overview
BofA Securities reported on Tuesday that the Adani Group’s operations are robust, supported by structural protections that ensure strong market access. The Group’s solid asset base is crucial for maintaining cash flow and the credit profiles of its USD bond issuers across various sectors, including ports, utilities, and renewable energy. ## Key Insights
– The Adani Group has demonstrated operational strength and market expansion amid global scrutiny, with ratings remaining stable despite changes in outlooks. – BofA maintains a positive outlook on the Group’s USD bonds, citing solid credit fundamentals. – Holding companies of the Group’s USD bond issuers have shown improved fundamentals over the past two years, driven by EBITDA growth and reduced leverage.
### Future Projections
– BofA anticipates further improvement in ADSEZ’s credit profile, bolstered by diversified ports and efficient operations, with leverage expected to remain at 2.5x despite significant investments. – Adani Transmission Ltd (ADTIN) and Adani Electricity Mumbai (ADANEM) are expected to sustain stable credit profiles due to their diversified operations and long-term contracts. – Forecasts indicate both ADTIN and ADANEM will keep leverage below 6x and coverage above 2x in the next three years. ### Market Performance
– Adani Group’s USD bonds have faced considerable volatility since early 2023; however, strong market access and favorable regulatory conditions have led to a significant recovery.
– The bonds have outperformed year-to-date, tightening by 80-325bps and trading 14-64 bps below pre-US indictment levels. – BofA’s constructive stance is supported by operational resilience and effective liability management, maintaining an Overweight rating on several bonds within the Group.
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