Materials

Report by Lucror Analytics

Buy the VEDLN 9.85% '33s at 101/9.6%/4.9Y; Hold the rest of the curve - Vedanta priced its USD 500m 144A/RegS 7NC2 notes at 9.125%, down from IPT of 9.5%. The lower-than-expected yield signals strong demand and investors’ growing confidence for the credit. Lucror’s Credit Bias on VRL remains "Stable", as the company's low-cost positions and robust balance sheet should help it weather commodity price volatility amid global trade tensions. The 9.85% '33s have the longest duration and would hence have the most upside if the credit spread tightens, which Lucror expects to occur following the successful issuance of new 7NC2 notes.

Materials

Report by Hemindra Hazari

The unlisted parent company of the Indian-listed Vedanta Ltd and Konkola Copper Mines in Zambia, has been in the news due to apprehensions that the company will find it difficult to meet payment of US$3bn bonds maturing in the next two years. Although the media have focused on the dollar bond maturity over the next two years, the company’s own disclosures reveal that in FY24 (year ending 31st Mar), US$4.3bn of bonds will be maturing and a further US$4.1bn in FY25. In fact, a liquidity analysis of the company reveals an even graver situation. According to calculations by Hemindra Hazari, the company has a liquidity shortfall of US$10.8bn in FY24!