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Vedanta Resources was downgraded to Caa3 from Caa2 by Moody’s following the consent of its bondholders towards their debt restructuring offer. Moody’s also downgraded the senior unsecured bonds issued by Vedanta Resources and those issued by its wholly-owned subsidiary, Vedanta Resources Finance II Plc, and guaranteed by VRL to Ca from Caa3. The debt restructuring offer by Vedanta was considered a distressed exchange and termed as a “default avoidance”. They added that that “creditors have incurred an economic loss with respect to the original promise”. Regarding Vedanta’s liquidity, Moody’s believes that it remains “persistently weak with management fees and dividends from its subsidiaries” insufficient to meet its debt maturities and interest.
Vedanta’s dollar bonds were trading stable with its 13.875% bonds due on January 21 trading at 92.81 cents on the dollar.