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Bond Market News
Vedanta Upgraded to Ba3 by Moody’s
May 6, 2026
Vedanta Resources Limited’s (VRL) was upgraded by a notch to Ba3 from B1 by Moody’s. The rating agency also upgraded the senior unsecured bonds issued by its subsidiary Vedanta Resources Finance II Plc to Ba3 from B2. The upgrade is driven by meaningful improvements in VRL’s earnings and cash flows, underpinned by higher production volumes, deeper vertical integration in aluminium, and supportive commodity prices. Moody’s expects the group to generate ~$7bn in annual EBITDA with a gross debt-to-EBITDA ratio of ~2.5x over the next two years. A key driver of the upgrade is VRL’s significantly strengthened liquidity position, achieved through proactive refinancing and disciplined liability management. The group now holds over $2bn in available multi-year committed credit facilities, and the holding company has no bond maturities until $300mn is due on its 10.25% 2028s. VRL’s debt substantially decreased to $5.2bn as of March 2026, down from $9.1bn in March 2022, and consolidated gross debt is expected to decline further to $15.5bn by FY2028. The group’s demerger, effective 1 May 2026, has also resulted in a more streamlined organisational structure, with the holding company holding direct ownership of all operating subsidiaries except Hindustan Zinc Limited, enabling a more diversified stream of dividend inflows that cover holding company interest expense by more than 2x. Operationally, the aluminium segment is expected to see meaningful cost improvements.
Vedanta’s dollar bonds traded stable. Its 11.25% 2031s were at 109.9, yielding 7.85%.
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