InvITs: Infrastructure Investment Trusts (InvITs) are similar to REITs; they utilize the pooled capital of investors to buy and manage income-generating infrastructure assets such as roads, transmission towers, wind, solar, ports, airports, telecom etc. InvITs are permitted to issue units (equivalent to equity) that are listed and traded on the bourses.
The rating of consolidated debt of InvIT is an opinion on the capacity of InvIT to repay its debt in a timely manner.
The most important driver of the InvIT’s credit rating is the credit quality of the assets it owns. CARE Ratings recognizes that the entire cash flow which is available to the InvIT to service its debt (that of both holdco and SPVs) is to be generated by its investments in infrastructure assets. Credit rating of borrowings of InvIT involves evaluation of broadly three key rating factors- credit quality of portfolio of assets, financial risk and management risk.
Click here for Rating Methodology on InvITs.