Moody’s again warns of junking Yes Bank ratings

In more trouble for the already struggling Yes Bank, global rating agency Moody’s Monday reiterated its decision to keep its ratings “under review for downgrade” for the second time in under two months citing worsening asset quality and higher exposure to shadow banks.

It has also extended its review to downgrading its long-term foreign and local currency bank deposit ratings of Ba1, foreign-currency senior unsecured MTN programme rating of Ba1, and baseline credit assessment of Ba2.

In a note Monday, the agency also said the bank’s counterparty risk assessment of Baa3 and domestic and foreign currency counterparty risk rating of Baa3 also remain under review for downgrades.

It can be recalled that on June 12, Moody’s had placed Yes Bank’s ratings under review for a downgrade, citing worsening asset quality driven primarily by the housing finance companies and non-bank finance companies. The agency has also extended its review for downgrade of the bank’s IFSC banking unit branch assessment of Baa3 and domestic and foreign-currency ratings issued “The review for downgrade was initiated on June 11, reflecting our expectation that the ongoing liquidity pressures on finance companies will negatively impact Yes Bank’s credit profile, given its exposure to weaker companies in the sector,”