Vedanta Slips Nearly 5% After Moody's Cuts Rating On Vedanta For Second Time; Know Why

Shares of Vedanta Limited fell 5 per cent 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.

The rating agency downgraded Vedanta Resources’ CFR to Caa3 from Caa2 and its senior unsecured bonds to Ca from Caa3, while maintaining 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.

“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,” Moody’s Senior Vice President Kaustubh Chaubal said in a statement.

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