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Rating agencies Crisil and India Ratings have both upgraded various bonds of YES Bank following the capital raise and improved liquidity position of the private sector lender.
Crisil has upgraded its rating on the ₹20,000 crore certificates of deposit (CD) of Yes Bank to ‘Crisil A2+’ from ‘Crisil A2’. It has reaffirmed its ‘Crisil BBB/Stable’ rating on the bank’s Tier-II bonds (under Basel III) and infrastructure bonds.
“The upgrade in the short term rating reflects improvement in the funding and liquidity profile of the bank, with gradual increase in its deposit base as well as sizeable capital raised recently,” it said in a statement.
Also read: YES Bank Q1 net profit down 60% at ₹45.45 crore
India Ratings and Research has also upgraded YES Bank’s Long-Term Issuer Rating to ‘IND BBB’ from ‘IND BB-’ while resolving the Rating Watch Evolving (RWE) and said the outlook is now stable.
“The multi-notch upgrade and the resolution of RWE reflects a significant improvement in YES Bank’s profile and operating metrics post its reconstruction in March 2020,” it said, adding that the upgrade factors in the bank’s substantial equity raise; reduced concerns on immediate liquidity position as its funding profile moves towards stability; a strengthened board, and limited incremental credit costs from identified delinquent assets, as the bank has ramped up its provision cover.
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