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S&P has upgraded Vedanta Resources' rating by one notch to B+ following the Indian metals and mining company's recent US$1.1bn bond issue, which addressed its 2026 and 2028 maturities.
The rating agency also raised the long-term issue rating on the company's guaranteed bonds to B from B–.
The US$1.1bn bond sold last month was evenly split between 5.5-year non-call 2.5 and 8.25-year non-call three tranches priced to yield 9.475% and 9.85% respectively.
The proceeds will be used to refinance the company's US$600m 9.25% 2026 and US$459.5m 13.875% 2028 bonds through a tender offer. Last week, the company accepted an aggregate US$402.62m and US$299.95m of the 2028 and 2026 bonds, respectively, tendered by the early deadline of January 27.
The final deadline is February 11.
S&P expects Vedanta to repay the remaining US$300m of the 2026 bonds once it becomes callable on April 23. It called the risk of Vedanta not repaying the 2026s by the call date "negligible".
The rating agency said the refinancing of the 2026 bonds will significantly reduce Vedanta's liquidity pressure. It expects the company to repay the majority of its US$950m of debt due before March 31 2026 with internal cashflow and the rest through refinancing on the back of improved access to funding.
Vedanta is rated B1 by Moody's and B+ by Fitch.
Source: IFR