Fitch Upgrades Vedanta Resources To B+; Outlook Stable
The upgrade follows a major reduction in Vedanta’s refinancing risks after $1.1 billion fundraising in new bonds and bank commitments for loans
(The Corner Office Journal) -- Fitch Ratings upgraded Vedanta Resources Ltd.'s long-term foreign-currency issuer default rating and its senior unsecured rating to B+ from B-. The outlook is Stable.
Fitch also raised the ratings on the $300 million June 2028 bonds and $500 million December 2031 bonds, issued by the natural resources conglomerate’s subsidiary Vedanta Resources Finance II Plc, to B+ from B-.
The bonds are unconditionally and irrevocably guaranteed by Vedanta.
The upgrade follows a significant reduction in Vedanta’s refinancing risks, after it raised $1.1 billion in new bonds and received bank commitments for loans worth $350m at the holding company -- formed by Vedanta and other offshore investment holding companies owned by the conglomerate -- in January 2025, Fitch said in a statement.
Reduced Refinancing Risks
The rating agency believes Vedanta’s refinancing risks have reduced substantially after its liability management exercise in January. It expects the proceeds to be used to refinance around $1.1 billion of bonds at the holding company, comprising $600 million due in April 2026 and $460 million in December 2028, and to meet other liquidity needs.
Vedanta’s improving funding access, evident from the bank loans secured on reasonable terms and the $1.5 billion of debt (including bank loans) with coupons below 10% despite elevated borrowing costs in recent years, also reduces refinancing risks, Fitch said.
The rating agency said the holding company will have a long-dated and well-spread maturity profile once the proceeds are used to refinance existing debt, with the next large bond maturity ($1.2 billion) more than four years away in September 2029.
The Stable outlook reflects Fitch’s view that Vedanta has adequate buffers to meet the holding company’s liquidity needs in the next 18 to 24 months, given its improved funding access, and the availability of internal accruals and alternate sources of funding, according to the statement.
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