Money & Banking

Moody’s upgrades YES Bank’s ratings, changes outlook to positive

Our Bureau Mumbai | Updated on March 17, 2020 Published on March 17, 2020

Global rating agency, Moody’s Investor Services, has upgraded YES Bank’s long-term foreign currency issuer and foreign currency senior unsecured MTN programme ratings to Caa1 from Caa3 and (P)Caa1 from (P)Caa3, respectively.

“The rating outlook is positive. Today's rating action concludes the review with direction uncertain that was initiated on YES Bank's ratings on March 6, 2020,” it said in a statement late on Monday night.

The rating agency said the rating action takes into account the reconstruction plan for the private sector lender as well as lifting of the moratorium.

“Given the new capital raised and the AT1 securities write-down, Moody's expects YES Bank's solvency has improved and that the recovery rates for the banks' depositors and senior creditors will be very high, supporting the current credit ratings,” it said, adding that it has also changed the rating outlook to positive, to reflect Moody's expectation that the bank's financial fundamentals can improve after the support from the government and Reserve Bank of India.

“Such extraordinary support will provide the bank some time to rebuild its franchise, including its deposit base,” it said.

It, however, warned that the rating could be downgraded if the bank’s fundamentals worsened due to an increase in asset risk or a significant outflow of deposits after the RBI's moratorium is lifted.

The YES Bank scrip was up nearly 10 per cent on its pre-open indicative price on BSE on Tuesday.

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Published on March 17, 2020
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