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Bond Market News
Vedanta Upgraded to B3 by Moody’s
October 28, 2024
Vedanta Resources (VRL) has been upgraded by a notch to B3 from Caa1 by Moody’s. The rating agency also upgraded the senior unsecured bonds issued by VRL and it’s wholly-owned subsidiary Vedanta Resources Finance II Plc to Caa1 from Caa2. The upgrade follows the $300mn tap of its 10.875% 2029s last week, demonstrating its access to funding. The proceeds from the tap will be applied towards partial repayment, at par, of the company’s $608mn 13.875% 2028s. Moody’s does not consider this as a distressed exchange because it does not serve as a means to avoid default and it does not result in an economic loss for investors. The one-notch differential of its senior unsecured notes to VRL’s ratings reflects the legal and structural subordination of the holding company’s bondholders to those of the rest of the group. VRL’s recent liabilities management exercise have resulted in paring down its debt and easing some of its liquidity pressure. Moody’s added that VRL will likely receive around $300mn annually in the form of management and brand fees from its operating subsidiaries.
Vedanta’s bonds traded stable with its 10.875% 2029s at 102.94, yielding 9.94%.
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