Moody's lowers Vedanta view to negative

Moody's Investors Service said it the outlook on Vedanta Resources Ltd.'s ratings to negative from stable.

Moody's also said it affirmed the company's Ba3 corporate family rating and the B2 rating on the senior unsecured notes.

The outlook reflects the heightened risk of cash movement outside Vedanta following a $561 million structured payment by the company's operating subsidiary to ultimate shareholder, Volcan Investments Ltd., the agency said.

Expectations for underlying operating earnings have been lowered, which will lead to elevated leverage for the ratings, Moody's said.

The ratings are based on an expectation that Volcan will not move cash from Vedanta to provide liquidity for itself, the agency said.

The deferred payment is therefore a clear departure from this expectation, Moody's said, and exacerbates the risk that Volcan will continue to use Vedanta as a financing vehicle.

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