NEW DELHI :
Moody's Investors Service on Thursday downgraded Yes Bank Limited's long-term foreign currency issuer rating to B2 from Ba3.
The ratings agency has also downgraded the bank's long-term foreign and local currency bank deposit ratings to B2 from Ba3, foreign currency senior unsecured MTN program rating to (P)B2 from (P)Ba3, and Baseline Credit Assessment (BCA) and Adjusted BCA to b3 from b1.
The outlook on the bank's ratings, where applicable, is negative, Moody’s said in a statement.
On 29 November, Yes Bank said that a number of investors have evinced interest to buy Yes Bank equities worth a total of $2 billion via a preferential allotment of shares.
While, the Yes Bank has received offers from a number of financial investors to invest up to $2.0 billion through new equity capital into the bank, the ratings agency feels there are significant execution risks around the timing, price and regulatory approvals required.
“Yes Bank's funding and liquidity compares weakly to other rated private sector peers in India, and could come under pressure, if the bank cannot strengthen its solvency in the next few quarters," Moody’s said.
Given the negative outlook, Moody's is unlikely to upgrade the bank's ratings over the next 12-18 months. However it could change the ratings outlook to stable, if Yes Bank concludes a material capital raise that strengthens its loss-absorbing buffers.
On Thursday, Yes Bank shares ended 1.5% lower at ₹62.10 on the BSE.