Vedanta stock slips 3% after Moody’s cuts rating citing significant default risk

Shares of Vedanta Limited fell 3 percent to Rs 253 in early trade on January 10 after Moody’s Investors Service downgraded the company’s corporate family rating (CFR) and senior unsecured bonds. This marks the second downgrade since September.

Moody’s downgraded Vedanta Resources’ CFR to Caa3 from Caa2. The rating agency also downgraded Vedanta’s senior unsecured bonds to Ca from Caa3. It has maintained its negative rating outlook.

At 9:20 am, the counter was trading at Rs 255, down 2 percent from the previous close on the NSE. In the last one year, the stock has tanked nearly 18 percent on the bourses.

Follow our markets blog for all the live action

Moody’s downgraded Vedanta Resources’ CFR to Caa3 from Caa2. The rating agency also downgraded Vedanta’s senior unsecured bonds to Ca from Caa3. It has maintained its negative rating outlook.

Vedanta Resources is anticipated to encounter significant liquidity challenges in the next 24 months, with a high risk of default, as indicated by the rating agency.

Moody’s senior vice president, Kaustabh Chaubal said, “We view the debt restructuring as default avoidance and assess that the creditors have incurred an economic loss with respect to the original promise. We consider the transaction to be a distressed exchange under our criteria, which underpins our downgrade of VRL’s ratings.”

In September and December, S&P Global Ratings lowered its rating for Vedanta Resources.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.