Global rating agency Moody’s has placed private lender YES Bank’s foreign currency issuer rating of ‘Ba3’ under review for downgrade.
The review for downgrade is driven by two factors: The bank’s weak financial performance in the quarter ended September 30, 2019; the bank on October 31, 2019, had said it had received a binding offer from a financial investor to invest up to $1.2 billion via new equity capital. The bank’s weakening financial position can be somewhat offset by planned capital raise. Nevertheless, there is significant execution risk around the timing, price, and regulatory approvals required. An inability to raise planned equity capital will negatively impact YES Bank’s credit profile and ratings, Moody’s added.