Junk bond issuers face refinance challenges: Moody’s

Mayur.Shetty@timesgroup.com

Mumbai:

Moody’s

has said that companies with

sub-investment grade ratings

, which have international borrowings, could find the going tough despite easy liquidity conditions. This is bad news for corporate issuers of

bonds

worth $6.3 billion, which carry speculative-grade rating and come up for maturity until 2022.

According to the

rating agency

, 2021 will see three

investment-grade rating

bond issues and two

speculative-grade bonds

come up for maturity. The investment-grade issues include the 525-million-euro bond issue of ONGC Videsh, that falls due in July 2021, the $500-million bond issued by Indian Oil Corporation that falls due in August 2021, and UPL’s $500-million bond due in October 2021.

The speculative-grade maturity includes

Vedanta’s

$670-million bond and

Bharati Airtel’s

$750-million-euro bond. The year 2022 will see two investment-grade bonds —

BPCL

($1 billion) and Reliance Industries ($1.5 billion) — come up for maturity. There will also be three speculative-grade redemptions JSW ($500 million),

Marble II

($500 million) and Vedanta ($1 billion) coming up for maturity.

On Vedanta Resources, Moody’s has said that the company’s B1 rating is under review for downgrade. Although it has diversified operations across multiple commodities that help relative margin stability, it has weak liquidity, large refinancing needs and elevated corporate governance risks which remain key rating sensitivity factors, said Moody’s