Moody’s Places Yes Bank Ratings Under Review, Direction Uncertain
Signage for Yes Bank Ltd. is displayed at a branch in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

Moody’s Places Yes Bank Ratings Under Review, Direction Uncertain

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Moody's Investors Service has placed Yes Bank Ltd.'s long-term foreign currency issuer rating of B2 under review, with the direction uncertain, citing "slowness in raising new capital".

"The placing of Yes Bank's deposit rating of B2 under review reflects Moody's expectation that the bank's standalone viability is getting increasingly challenged by its slowness in raising new capital," the U.S.-based ratings agency has said in a statement. Potential credit risk to the bank's senior creditors is uncertain as there are a number of diverse scenarios that could affect the rating in either positive or negative directions.

Moody's said it 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, with the direction uncertain."

Yes Bank is in discussions with a number of investors to raise new equity capital, which would be credit positive if executed successfully, Moody's said adding that "If the bank successfully recapitalises and repairs and cleans its balance sheet, its ratings could stabilise or face upward pressure".

Moody's has downgraded Yes Bank's Baseline Credit Assessment (BCA) and adjusted BCA to caa2 from b3. It further said that "because the viability of the bank absent a large capital injection is in question, Moody's has downgraded the bank's standalone credit profile or its BCA to caa2 from b3."

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