Moody’s upgraded Yes Bank from B2 to Ba3, assigning a stable outlook to the Indian bank. The rationale for the upgrade is the improvement of Yes Bank’s credit profile as it plans an equity capital raise from Carlyle and Advent. The deal will fill the bank’s coffers with $1.1bn, in return for a 10% stake each to Carlyle and Advent. Moody’s expects that the capital raise will elevate Yes Bank’s CET 1 by a total of 3.8 percentage points from 11.9% as of June 2022. The rating agency also notes that Yes Bank’s deal with JC Flowers ARC to offload its nonperforming assets (NPA) and stressed loans will further bolster its credit position by easing management burden on resolving legacy problem assets. In Moody’s view, these moves by Yes Bank’s management will limit potential asset quality risks arising from increasing global macroeconomic headwinds.
Yes Bank’s 3.75% 2023s are trading flat at 99.25, yielding 5.31%.