S&P rates Vedanta notes B-

S&P said it assigned its B- rating to Vedanta Resources Ltd.’s proposed guaranteed senior unsecured notes.

“We rate the proposed notes the same as the issuer credit rating on Vedanta Resources (B-/negative/--). We do not notch the issue rating on the notes for subordination risk because a majority of the company’s assets are in India, a jurisdiction where we believe the priority of claims in a bankruptcy scenario is highly uncertain,” S&P said in a press release.

Vedanta plans to use the proceeds for an all or any tender offer for its $670 million bonds due June 2021. The proposed notes will be issued by Vedanta Resources Finance II plc and guaranteed by Vedanta Resources and two of its subsidiaries – Twin Star Holdings Ltd. and Welter Trading Ltd. These two subsidiaries together own 38.1% in Vedanta Ltd., which is Vedanta Resources’ 50.1%-owned subsidiary.

The outlook is negative.

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