Moody's lifts Reliance senior bond from junk

Moody's Investors Service said it has upgraded Reliance Industries' foreign currency senior unsecured bond rating to Baa3 from Ba2 and assigned a local currency issuer rating of Baa3.

Moody's also said it continues to review for possible upgrade on both ratings.

The action was prompted by Reliance's continued strong operational and financial profiles, which remain supported by its dominant market position in refining and petrochemicals, the benefits of economies of scale, its low cost integrated operations, the strong level of domestic demand and the favorable outlook for the petrochemicals industry in the next 12-18 months, Moody's said.

The rating further reflects the expectation that Reliance's financial profile is likely to benefit from the demerger plan. Moody's said it expects both ratings will be upgraded to Baa2 if the demerger is pursued in accordance with this plan. If the demerger is for some reason blocked, Moody's said it expects to confirm Reliance's ratings at Baa3 with a stable outlook.

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