Moody's upgrades Yes Bank ratings; outlook changed to positive2 min read . Updated: 16 Mar 2020, 09:54 PM IST
- Yes Bank on Monday said it has approved reconstitution of its board with Prashant Kumar as the new MD & CEO
- The moratorium on Yes Bank, placing a withdrawal limit of ₹50,000 on deposits, is to be lifted by 6 pm on 18 March
New Delhi: Acting quickly on the fast evolving capital position under the RBI-mandated restructuring of Yes Bank, rating agency Moody's on Monday upgraded its ratings with a positive outlook.
Earlier in the day, Yes Bank announced that seven banks led by SBI have invested ₹10,000 crore, boosting its core capital,
Later, Reserve Bank Governor Shaktikanta Das said if need be the central bank would give additional capital support to the crippled lender.
The central bank had superseded Yes Bank board on April 5 and placed it under an administrator.
"We today upgraded Yes Bank long-term foreign currency issuer and foreign currency senior unsecured MTN programme ratings to Caa1 from Caa3 and (P)Caa1 from (P)Caa3 respectively," Moody's Investors Service said in a late evening statement.
Accordingly, the credit outlook has also been changed to positive from negative.
'Caa' ratings are below investment grade.
Yes Bank on Monday said it has approved reconstitution of its board with Prashant Kumar as the new MD & CEO.
Kumar, former chief financial officer and deputy managing director of State Bank of India, is currently overseeing the troubled private sector lender as RBI-appointed administrator.
The other board members will be Sunil Mehta, former non-executive chairman of Punjab National Bank, as the non executive chairman of Yes Bank, Mahesh Krishnamurthy and Atul Bheda as non-executive directors.
SBI will have the right to nominate two directors on the board of directors of Yes Bank.
"The reconstitution of the board of directors of the Bank as set out, shall take effect immediately after the expiry of seven calendar days from the date of cessation of the moratorium in accordance with paragraph 11 of the Scheme," Yes Bank said in a regulatory filing undersigned by the bank's administrator Kumar.
The moratorium on Yes Bank, placing a withdrawal limit of ₹50,000 on deposits, is to be lifted by 6 PM on March 18, 2020 which is much before the original date of April 3.
Mortgage lender HDFC will pick up 7.97 per cent stake in Yes Bank for a ₹1,000 crore capital infusion in the cash-strapped lender.
On March 14, Yes Bank allotted 100 crore shares of face value of ₹2 each to the Corporation aggregating to 7.97 per cent of the post issue equity share capital of Yes bank, HDFC said in a regulatory filing on Monday.
The allotment of shares comes "after giving effect to the allotment of shares to State Bank of India, the Corporation, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Federal Bank, Bandhan Bank and IDFC First Bank ," it said.
On Friday, HDFC said it is investing in 100 crore equity shares of ₹2 each in Yes Bank for a consideration of ₹10 per share (including ₹8 premium) for an aggregate consideration of ₹1,000 crore.
As per the scheme of reconstruction of Yes Bank, 75 per cent of the total investment by the Corporation would be locked in for three years, HDFC had said.
SBI has invested ₹6,050 crore in crisis-ridden Yes Bank.
ICICI Bank, Housing Development Finance Corporation (HDFC), Axis Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First Bank have also joined the SBI-led consortium and invested in Yes Bank.
Axis Bank will invest ₹600 crore by buying 60 crore shares and Kotak Mahindra Bank will infuse ₹500 crore after purchasing 50 crore shares.