Rating agencies CRISIL and India Rating (Ind-Ra) have upgraded Yes Bank’s infrastructure bonds and other papers on the back of improvement in its funding and liquidity profile recently.
On Rs 20,000 crore of certificate of deposit to A2 plus from A2 besides reaffirmation its BBB/stable rating CRISIL upgraded the Yes bank’s infrastructure bonds of improvement in its funding and liquidity profile recently. The rating was done on the private lender’s tier two bonds under Basel III and infrastructural bonds.
On the other hand Ind-Ra also inclined toward the bank’s long-term issue rating to BBB from BB-(minus)while resolving the rating wtch evolving. Explaing the rating action,CRISIL said the “upgrade in short-term rating reflects an improvement in funding and liquidity in its deposit base as well as sizeable capital raised recently.”
With this, Yes Bank on the special liquidity facility has paid back Rs 35,000 crore out of the Rs50,000 crore to avail from the RBIin March 2020, which is ahead of its earlier plan.
Moreover, the lender’s liquidity coverage ratio(LCR) has also improved in recent months. It stands at 114.1% as of June 2020, as compared to 37% in March 2020.
CRISILadded that the rating continues to be supported by the expectation of further extraordinary systemetic support from the key stakeholders and substantial ownership by the State Bank of India (SBI), which will play a major role in Yes Bank’s credit rating in the future.
Meanwhile, Ind-Ra also said that multimotch uward revision and the resolution of rating watch manifest considerable progress in the bank’s profile as well as operating metrics after its reconstruction in March(2020).
The agency also expect from the bank to continue to better its operating metrics and liability profile over the next few quarters as it continues to make provision for coronavirus- related impact on its portfolio.
