Rating agency Moody’s Investors Service has reduced its rating on senior unsecured bonds issued by Vedanta Resources, the company of business tycoon Anil Agarwal.
Moody’s said it has reduced its rating on senior unsecured bonds issued by Vedanta Resources to Ca from Caa3. The brokerage firm has also reduced the corporate family rating (CFR) of Vedanta Resources from Caa2 to Caa3.
Let us tell you that Vedanta Resources is the parent company of Vedanta Limited listed in India.
Shares recovered after pressure
The effect of downgrading of Vedanta Resources’ rating was also seen on the shares of Vedanta Limited on Wednesday. In the morning, they were trading at Rs 251.95 on NSE with a fall of Rs 8.5. However, the situation improved in the afternoon and finally it closed with a slight gain.
What did Moody’s say?
Moody’s Senior Vice President (Senior VP) Kaustubh Chaubal said, ‘We view loan restructuring as a step to avoid default and our assessment is that creditors have suffered economic loss in relation to the original promise. We consider the transaction to be a distressed exchange under our criteria, which highlights our downgrade of VRL’s rating.
Why was the outlook kept negative?
Moody’s has maintained negative rating outlook. According to the rating agency, the company will be surrounded by liquidity problems in the next 24 months, which also includes the risk of default.
