Rating agency Moody’s Investors Service on Monday downgraded the corporate family rating (CFR) and the foreign-currency senior secured rating of Indiabulls Housing Finance to B2 from Ba2, citing the company’s ongoing challenges in terms of accessing funds.
Moody’s also downgraded Indiabulls’ foreign and local currency senior secured medium-term note (MTN) programme ratings to (P)B2 from (P)Ba2. The outlook on all ratings, where applicable, remains negative, the rating firm said in a statement. This means that Moody’s does not expect the ratings to be upgraded.
The downgrade comes days after the Reserve Bank of India (RBI) rejected a proposed merger of Indiabulls Housing with Chennai-based Lakshmi Vilas Bank (LVB). The housing finance company (HFC) is among the entities which took the hardest knock from a liquidity crunch that first emerged in September 2018 after defaults by the Infrastructure Leasing & Financial Services (IL&FS) Group.
Even as liquidity conditions eased in May this year, several HFCs and other non-bank lenders have been unable to raise money from banks and mutual funds in an environment of heightened risk aversion. —FE
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