Bond Market News

Vedanta Ltd. announced an interim dividend of INR 17.5/share ($0.2/share) amounting to INR 65bn ($797mn), along expected lines. The large dividend by the Indian subsidiary will help its parent Vedanta Resources boost its debt refinancing efforts. Vedanta Resources has committed to reduce its debt by $4bn before end-2025. While the dividends by its operating subsidiaries will help the parents, analysts note that debt concerns remain. The conglomerate has $3bn in dollar bonds maturing through 2024 with $900mn in maturities due in April and May 2023. Analysts highlight that new financing in offshore markets by high yield issuers will be difficult to access due to the spike in interest rates. Any weakening in commodity prices would also impact the company. Bloomberg analysts note that its 2023s “may be best-positioned to hold onto recent price gains” due to better transparency for Vedanta Ltd.’s operating prospects in the short-term. Longer-dated bonds they note, “may remain under pressure due to a lack of visibility on access to funding”.

Vedanta’s 7.125% 2023s were up 0.4 points to 92.25, yielding 24.32%.