Research Update: Vedanta Resources Downgraded To 'CC' On Potential Bond Extensions; Remains On CreditWatch Negative

The successful completion of a liability management exercise initiated by Vedanta Resources Ltd. to extend the maturities of three of its U.S. dollar-denominated bonds will constitute a distressed exchange under our criteria. If the U.K.-incorporated commodity producer does not proceed with the transaction, we see rising risks of a conventional payment default. This is given US$1 billion in bonds due on Jan. 21, 2024, and limited progress on alternate repayment plans. We lowered our long-term issuer credit rating on Vedanta Resources and long-term issue ratings on the company's bonds due January 2024, August 2024, and March 2025 to 'CC' from 'CCC'. The ratings remain on CreditWatch with negative implications, where they were first placed on Sept. 29, 2023. The CreditWatch

...- The successful completion of a liability management exercise initiated by Vedanta Resources Ltd. to extend the maturities of three of its U.S. dollar-denominated bonds will constitute a distressed exchange under our criteria. - If the U.K.-incorporated commodity producer does not proceed with the transaction, we see rising risks of a conventional payment default. This is given US$1 billion in bonds due on Jan. 21, 2024, and limited progress on alternate repayment plans. - We lowered our long-term issuer credit rating on Vedanta Resources and long-term issue ratings on the company's bonds due January 2024, August 2024, and March 2025 to '##' from '###'. The ratings remain on CreditWatch with negative implications, where they were first placed on Sept. 29, 2023. The CreditWatch status reflects the likelihood that we would downgrade Vedanta Resources to '##' (selective default) if the company completes the transaction. We could also lower the ratings on the company's three bonds to 'D' in...

Research Update