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Bond Market News
Vedanta Launches Consent Solicitation Exercise For Its Bonds; Downgraded to CC by S&P
December 14, 2023
Vedanta Resources Ltd. (Vedanta) along with Vedanta Resources Finance II Plc, Twin Star Holdings Ltd. and Welter Trading Ltd. have initiated a consent solicitation for its dollar bonds due in 2024, 2025 and 2026, according to an exchange filing. Through the exercise, Vedanta aims to extend the debt maturity profile, amend certain covenants and terms of the bonds to improve its capital structure and overall financial position. The company will exchange about half of the January 2024 notes with new bonds maturing in January 2027, and most of the August 2024 and March 2025 bonds, with new amortizing bonds maturing in December 2028.
As a consequence, S&P downgraded the ratings of Vedanta to CC from CCC. According to S&P, a private credit facility of $1.25bn to Vedanta has been given priority over other creditors and the attributes of the transaction do not provide adequate compensation to bondholders. S&P has maintained Vedanta with its 2024s and 2025s on creditwatch negative, which reflects a possibility of Vedanta being downgraded to SD (selective default) and its three bonds to D (default) if the company completes the transaction.
Vedanta’s bonds are trading higher this morning with the 13.875% January 2024s are up 0.1 points to 93.6 cents on the dollar.
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