ICRA upgrades YES Bank's ratings on improved liquidity situation

ICRA has upgraded the ratings of various securities issued by private sector lender YES Bank. The rating upgrade came on account of the improved financial profile of the bank over the period, ICRA said.

The Infrastructure bonds and Basel II compliant lower tier-II bonds have been upgraded to 'BBB' (Stable) from 'BB+' (Rating watch). Basel III compliant tier II bonds were upgraded to 'BBB-' from 'BB'. Basel II compliant tier I bonds and upper tier-II bonds were upgraded to 'BB+' (Stable) from a default (D) rating, YES Bank said in an exchange filing.

"The rating upgrade factors in the sizeable capital raise of Rs 15,000 crore in July 2020, which has resulted in an improvement in the capital ratios of Yes Bank," ICRA said in its statement on Friday.

Earlier in August, Moody's had raised private sector lender's long term issuer rating by a notch to B3 from Caa1. The rating agency said that the upgrade factors in the stability and subsequent increase in the private sector lender's deposit base. This, coupled with the recent capital raise, has helped.

Meanwhile, YES Bank has fully repaid Rs 50,000 crore to the Reserve Bank of India (RBI) it borrowed under the SLF (special liquidity facility) window. The private sector lender took the money amid the crisis faced earlier this year.

Addressing the bank's shareholders at its annual general meeting (AGM) held virtually on Thursday, chairman Sunil Mehta said that the entire payment was made well ahead of the due date as the private sector lender received strong customer inflows.

Also read: Yes Bank pays entire Rs 50,000 crore dues to RBI way ahead of due date