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Bond Market News
Vedanta Warned of Possible Downgrade by S&P
September 19, 2023
Rating agency S&P in a recent note has warned of the possibility of a downgrade to Vedanta Resources. As per the note, it said that any changes in Vedanta’s financial policy regarding debt transactions may result in a potential downgrade of its current B- rating to CCC or even CC. As per ET that accessed the report, Vedanta’s rating could be downgraded if it tries to strike a debt deal without sufficient compensation for its debtholders or if it buys back its bonds at a discount to face value in secondary markets. In early August, S&P revised the outlook on Vedanta to negative from stable, citing increased funding risks. Earlier this week, Vedanta’s management team met with investors in Singapore and Hong Kong and were said to have discussed a potential extension of upcoming bonds due via partial bond exchange and partial upfront payment. Business Today reports that Vedanta has about $3bn of debt due until August 2024 with a funding gap of $2bn. Besides, it also has interest expenses of $650mn.
Vedanta’s dollar bonds were trading stable with its 6.125% bonds due August 2024 at 63.94 cents on the dollar.
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