Moody’s raised the rating from the lowest investment grade of Baa3 to Baa2 and changed the outlook from stable to positive. It’s the first upgrade of India’s rating in 14 years.
Backing the reforms initiated by the government in the last three years, Moody’s said in a statement, “The decision to upgrade the ratings is underpinned by Moody’s expectation that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential.”
On the other hand, Moody’s Investors Service has withdrawn Reliance Communications Limited’s (RCom) Ca rating (CFR) and its negative outlook after the company defaulted on interest payment to bondholders.
The rating agency has also withdrawn the Ca rating on the company’s senior secured notes, said a Moody’s statement. On 6 November, RCom announced that pursuant to the invocation of Strategic Debt Restructuring (SDR) scheme by the lenders of the company as per the Reserve Bank of India guidelines agreed in June 2017, the company is under a debt standstill period until December 2018, as it looks to complete a corporate and debt restructuring. Accordingly, for the time being, no payment of interest and/or principal is being made to any RCom lenders and/or bondholders.
The half-yearly interest payment on its $300 million senior secured bond was due on 6 November 2017. According to the agreement, the company had a grace period of seven days, after which an event of default would occur.
But as Moody’s very particular about financial activities and consider and using grace period considered disgraceful and even if a day is crossed over the actual time it is taken as financial failure and mention as less safe for investors and financers, has withdrawn the ratings, the statement added.