Moody's Investors Service today placed Yes Bank's long-term foreign currency issuer rating of B2 under review, "with the direction uncertain." The rating agency has also placed the bank's long-term foreign and local currency bank deposit ratings of B2, and its foreign currency senior unsecured MTN program rating of (P)B2, under review.
Explaining the rationale of putting Yes Bank's deposit rating of B2 under review, Moody's said "the bank's standalone viability is getting increasingly challenged by its slowness in raising new capital."
"Yes Bank is in discussions with a number of investors to raise new equity capital, which would be credit positive if executed successfully. If the bank successfully recapitalizes and repairs and cleans its balance sheet, its ratings could stabilize or face upward pressure," Moody's said.
downgraded the bank's standalone credit profile or its BCA to caa2 from b3.
Yes Bank shares were down about 4% in early trade today.
In a statement on January 15th, Yes Bank said: "The bank's overall capital adequacy ratio is comfortably above regulatory requirements and all efforts are being made to financially strengthen the bank even further."
Moody's said it could change the bank's "ratings outlook to stable or upgrade the bank's ratings, if Yes Bank concludes a material capital raise that strengthens its equity capital ratio, after providing for the potential stressed assets, to a level in-line with other similarly rated Indian banking peers."