Hyderabad: Three major oil and gas companies, namely Oil and Natural Gas Corporation Limited (ONGC), IOCL and Vedanta Resources Limited, together own around USD 1.9 billion of rated US dollar bonds which are maturing next year, rating agency Moody's Investor Services said. "Capital markets are volatile and investor appetite remains selective, so refinancing risks will remain elevated particularly for high-yield issuers such as Vedanta, which accounts for around 47 percent of the upcoming bond maturities," it opined in a report on December 1.
"Vendanta's USD 400 million (coupon rate 8 percent) and another USD 500 million (7.12 percent) bonds would mature on April 23 and May 31 next year, respectively. Additionally, ONGC's USD 500 million bonds (3.75 percent) and IOCL's USD 500 million bonds (5.75 percent) would mature on August 1 and May 7 next year, respectively," said the report.
The rating agency also said that the weakening rupee is credit negative for Indian companies that generate revenue in the domestic currency but depend on the US dollar to fund their operations and also credit negative for companies with dollar-denominated costs but rupee-based revenue. "However, we expect the negative credit implications to be limited or temporary," Moody's said.
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