Moody’s lowers Vedanta Resources rating to ‘B3’ implying high credit risk

Global rating agency Moody’s on Monday downgraded the corporate family rating (CFR) of Vedanta Resources Limited (VRL) from “B2” to “B3”, reflecting high credit risk.

VRL’s persistently weak liquidity and high refinancing needs with large, looming debt maturities are a pertinent credit risk, especially amid rising inflation and higher interest rates, Moody’s said.

Kaustubh Chaubal, Senior Vice President, Moody’s, said the rating action reflects rising refinancing pressure as VRL was yet to obtain funding for its large maturities due in April 2023 and Vedanta Resources Finance II Plc’s due in May 2023.

It (arranging finances) was taking longer than Moody’s earlier expectations of completion by October 2022. The proximity of the large maturities’ due dates without a refinancing completed well in advance indicates VRL’s aggressive liability management, he added.