Fitch: Vedanta loans BB

Fitch Ratings said it assigned BB ratings to Vedanta Resources plc's $170 million and $180 million guaranteed senior unsecured loan facilities.

The $170 million senior unsecured loan facility is issued by Valliant (Jersey) Ltd. and guaranteed by Vedanta. The $180 million senior unsecured loan facility is issued by Vedanta Finance (Jersey) Ltd. and guaranteed by Vedanta.

The loans are rated at the same level as Vedanta's senior unsecured rating of BB based on the unconditional and irrevocable guarantee provided by the company, Fitch said.

The single-notch differential between the issuer default ratings and the senior unsecured ratings reflects structural subordination at Vedanta due to its complex and fragmented holding structure, the agency added.

The ratings consider the impact of regulatory risks on the metals and mining industry, particularly in India, Fitch said. The ban on iron ore mining operations during the financial year to March 2013 impacted Vedanta's iron ore mines in the state of Goa, its largest mines, the agency said.

The company has been facing challenges in obtaining clearance for its bauxite mining operations and also in expanding its alumina processing facility in India, Fitch said.

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