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Adani Ports and Special Economic Zone Ltd (Adani Ports) has figured among the 12 companies in Asia that are facing challenges in retaining investment grade ratings, Moody’s Investors Service has said.
“The rating of Adani Ports and Special Economic Zone Ltd (Baa3 negative) is under pressure due to lower growth trajectory from slower shipment volumes, particularly coal,” said a report released by Moody’s Investors Service, titled ‘Twelve companies face challenges in retaining investment grade ratings in 2017’.
The report indicates that eight of the 12 companies at risk this year are Chinese and the negative outlooks on six of this group are driven mostly by their weakened standalone credit profiles.
Kaven Tsang, Moody’s Vice-President and Senior Credit Officer, said the number of companies with the greatest potential to lose their investment grade ratings has spiked to a multi-year high of 12 — compared with four at end 2015 — and rating downgrades are likely if their credit profiles do not improve to the levels “we expect by end-2017”.
These 12 companies had approximately $7 billion of outstanding rated bonds as of January 17, compared with $3.2 billion for the four companies similarly affected at the end of 2015.
Lina Choi, also Moody’s Vice-President and Senior Credit Officer, said that debt-funded expansion and/or acquisitions are the key drivers for the negative rating pressure for seven out of the 12 companies.
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