S&P pulls Vedanta from watch

S&P said it removed Vedanta Resources Ltd.’s ratings from CreditWatch with developing implications and affirmed its B- ratings on the company and its senior unsecured bonds. The agency placed the ratings on developing watch on Aug. 11.

Concurrently, S&P withdrew its preliminary rating assigned to the $1.4 billion bond issued by Vedanta Holdings Mauritius II Ltd. and guaranteed by Vedanta Resources. The bond has been redeemed under terms of the failure of the privatization of Vedanta Ltd.

“The failed privatization of Vedanta Ltd. has narrowed Vedanta Resources’ refinancing options. An inefficient corporate structure remains Vedanta Resources’ key credit weakness and rating driver. The company’s funding options would have improved if Vedanta Ltd. had been privatized. Failure to do so has raised refinancing risk, given large debt maturities coming due, especially in 2022,” S&P said in a press release.

The agency said dividend payments and intercompany loans will be adequate for debt servicing over the next 12 months. Vedanta Resources faces debt maturities of about $1.8 billion over the next year.

The outlook is negative.

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