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Bond Market News

Vedanta May Find Refinancing Debt Maturities a Challenge: S&P

S&P Global has said that Vedanta Resources Ltd. (VRL)’s refinancing of its debt can be a challenge in the current tightening capital markets. VRL has over $ 2bn in debt maturities due in the next six months with a $1bn 6.375% dollar bonds maturing in July 2022. The bond was previously expected to be refinanced through a new bonds issuance in early 2022. S&P indicated VRL’s funding options have reduced given the current market, but strong underlying operations and higher commodity prices are supportive of its ability to meet near-term debt obligation. Using its internal resources and $500mn in new funding will make its debt repayment manageable and given the company track record, the new funding will be achievable, S&P noted. For debt servicing at VRL for the next two quarters, dividends from Indian subsidiary Vedanta Ltd. will play a major role. Even if the company fails to raise new funds, VRL can step-up dividends from Vedanta Ltd., it added. Moody’s in February, had revised its outlook on Vedanta to negative citing large refinancing requirement and tight capital markets. As per VRL’s H2 2022 results, it had $4.2bn in cash and liquid investments while gross debt stood at $15.5bn.

Vedanta Resources dollar bonds were trading higher, its 6.125% 2024 were up 0.38 points to 82.63 yielding 15.1%.

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