Vedanta, the mother or father agency of Mumbai-listed Vedanta Ltd, has debt repayments of about USD 900 million every in fiscal 2025 and 2026 (years ending March 31).

S&P World Scores has downgraded debt-laden Vedanta Assets Ltd to ‘selective default’ after the mining conglomerate concluded a cope with collectors to increase the maturities of its three greenback bonds.

“We view Vedanta Assets’ simply concluded legal responsibility administration train, which concerned three of its US dollar-denominated bonds, as a distressed transaction,” the score company stated in an announcement.

The junk-rated Vedanta had final week said that its bondholders have authorised extension of the maturities of USD 3.2 billion of bonds maturing in 2024 and 2025.

Below the deal, the corporate can pay USD 779 million upfront, with the remaining principal prolonged by as a lot as 4 years.

“On January 12, 2024, we lowered our long-term issuer credit standing on Vedanta Assets to ‘SD’ (selective default) from ‘CC’. We additionally lowered the difficulty rankings on the corporate’s bonds due January 2024, August 2024, and March 2025 to ‘D’ from ‘CC’,” S&P stated.

The problem score on the UK- and India-based miner’s April 2026 bond (which was not a part of the legal responsibility administration transaction) stays ‘CCC’ and on CreditWatch with creating implications.

As a part of the extension train, Vedanta addressed the reimbursement of three bond maturities totaling USD 3.2 billion utilizing a mixture of money and new bonds.

It exchanged about half of the January 2024 bond with new bonds maturing in January 2027, with the remaining paid in money.

The corporate additionally exchanged 94 p.c and 84 p.c respectively of the August 2024 and March 2025 bonds for brand new amortizing bonds that may mature in December 2028, with the remaining pay as you go in money.

“We regard the transaction as distressed, and never merely opportunistic,” S&P stated.

It’s because “the probability of a standard default within the absence of the transaction was excessive” as a result of Vedanta’s giant upcoming debt maturities and diminished entry to each inside money stream and exterior financing.

“We don’t contemplate the brand new phrases of the proposed transaction as constituting satisfactory compensation to offset the maturity extension and a few cashflow subordination to a brand new financing facility,” it stated.

Vedanta, the mother or father agency of Mumbai-listed Vedanta Ltd, has debt repayments of about USD 900 million every in fiscal 2025 and 2026 (years ending March 31).

“Whereas that is a lot decrease than the corporate’s refinancing wants of about USD 3 billion yearly over the previous two to 3 years, we consider the maturities are nonetheless significant, given the corporate’s diminished financing entry. These debt maturities will have to be refinanced or met by way of the creation of extra dividend capability at its subsidiaries, significantly at Hindustan Zinc Ltd,” the score company stated.

S&P stated it believes additional deleveraging at Vedanta Assets, presumably pushed by asset gross sales at subsidiary Vedanta Ltd, might be essential to sustainably enhance entry to exterior funding.

“In the intervening time, we anticipate to lift our score on Vedanta Assets to the mid-to-high ‘CCC’ class in coming days,” it stated.

The agency has additionally tied up a brand new USD 1.25 billion personal credit score facility maturing in April 2026 to fund the upfront redemption cost of the bonds.