Moody’s downgrades Yes Bank’s debt ratings

Outlook negative, says rating agency

Moody’s Investors Service on Thursday downgraded private sector Yes Bank’s debt instrument’s ratings and also Baseline Credit Assessment (BCA) and Adjusted BCA to b3 from b1.

The outlook on the bank’s ratings, where applicable, is negative.

“The rating actions reflect Moody’s view that Yes Bank’s funding and liquidity compares weakly to other rated private sector peers in India, and could come under pressure, if the bank cannot strengthen its solvency in the next few quarters,” the rating agency said.

The private sector lender is scouting for an investor to boost its capital position and last week said a few investors have shown interest to pump in $2 billion. However, markets were not impressed as the stock came under pressure after the announcement.

Moody’s added that there are significant execution risks around the timing, price and regulatory approvals required for the investment.

Moody’s said it expects Yes Bank’s common equity tier 1 (CET1) ratio of 8.7% at the end of September 2019 to come under significant pressure unless the bank can raise new capital in the next few quarters.

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Printable version | Feb 18, 2020 8:55:48 AM |

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