S&P affirms Vedanta

Standard & Poor's said it affirmed the BB corporate credit rating on Vedanta Resources plc and BB its senior unsecured debt, and removed ratings from CreditWatch with negative implications, where they were placed on June 26.

The outlook is stable.

The affirmation follows the company's review of Vedanta's financial policy, growth aspirations and asset investment or divestment strategies, according to the agency.

"The BB rating reflects our opinion of: the substantial execution risks at some of the company's large projects under construction; the location of a sizable portion of the assets in India; Vedanta's aggressive debt-funded growth strategy; and its exposure to volatile London Metals Exchange-traded metals prices and demand level," said S&P analyst Craig Parker said in a statement.

Partly offsetting these weaknesses is Vedanta's diversified metal and mining assets, its favorable market position and proximity to the resource-hungry Indian economy, the company's cost-competitive operations, corrective measures that the company implemented in response to the market downturn and a financial policy that seeks to maintain sizable cash balances and robust liquidity, the agency said.

The issuer has a ratio of adjusted debt to EBITDA of 2.4x.

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