Vedanta Resources dropped in the bond market after a credit rating cut deeper into junk territory by Moody’s Investors Service.
The miner’s 2026 dollar note fell 4.8 cents on the dollar to about 58 cents, the biggest drop since October 12, Bloomberg-compiled prices show. Moody’s lowered its corporate family rating to B2 from B1 Thursday, citing weak liquidity and high refinancing needs. It’s the second downgrade this year after the rating firm cut its grade by a notch in March.
Pressures have been mounting at the mining giant after a failed attempt in October to delist its India unit. That was a setback given a delisting could have helped give the parent greater access to profits generated by operating companies, and allayed concerns about the debt load at the parent.
People familiar with the matter said last week that Vedanta Resources had begun sounding out debt holders about the possibility of extending maturities on some of its dollar bonds to reduce refinancing pressures. Among the notes involved were its $670-million of securities due June next year, the people said.
The company announced a tender offer for those 2021 bonds on Friday. The price of the securities rose after the announcement. The company also hired banks for a series of fixed-income investor meetings starting Friday for a possible offering of new dollar securities.
The company’s liquidity is “severely challenged” with $2.8-billion of its debt maturing from January 2021 through June 2022, according to the Moody’s note.