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Bond Market News
UPL Downgraded to BB by Fitch
May 27, 2024
UPL Corporation was downgraded by a notch to BB from BB+ by Fitch. The senior unsecured notes of UPL were also downgraded by the same measure. The downgrade follows the poor operating performance posted by the company in the FY 2024. The company’s EBITDA fell significantly, and higher finance costs led to negative free cashflow and a surge in its leverage. For instance, UPL’s total debt-to-EBITDA leverage jumped to 8.9x in FY 2024 from 3.6x in FY 2023. Fitch has a negative outlook on UPL as oversupply from China could delay the deleveraging process and sustain the pressure on the company’s financial profile.
UPL’s bonds were nearly unchanged with its 4.5% 2028s at 87.8 cents on the dollar, yielding 8.34%.
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