YES Bank shares extend decline after Moody's downgrades long-term foreign currency issuer rating

YES Bank share price extended decline for the second consecutive session after global rating agency Moody's Investors Service downgraded private lender's long-term foreign-currency issuer rating to Ba3 from Ba1 and maintained 'negative' outlook with concerns over lower than expected amount of capital raised by the bank.

YES Bank share price fell 7.56% to intraday low of Rs 55 against previous close of Rs 59.50. The large cap stock has fallen 13.30% in the last two days and currently trades mere 4.66% away from 52-week low of Rs 53.15 on BSE.

YES Bank share price falls over 7% despite lender's plan to raise $1.2 billion

Overall 132.5 lakh shares and 1362.7 lakh shares are currently changing hands on BSE and NSE respectively. The stock has fallen over 68% year-to-date.

"The downgrade of YES Bank's ratings takes into account the lower than expected amount of capital raised by the bank recently; and the risk that the substantial decline in the bank's share price will challenge its ability to raise sufficient capital to maintain the rating at its previous level," Moody's said in its report.

Moody's downgrades long-term rating of YES Bank, maintains negative outlook

"Moody's has also downgraded the bank's long term foreign and local currency bank deposit ratings to Ba3 from Ba1, foreign currency senior unsecured MTN program rating to (P)Ba3 from (P)Ba1, and Baseline Credit Assessment (BCA) and adjusted BCA to b1 from ba2," the credit rating agency said in a latest research report.

In a note on Wednesday, the rating agency said that "today's rating action concludes the review for downgrade initiated on 11 June 2019".

The negative outlook reflects the risk of further deterioration in the bank's solvency, funding or liquidity, as the bank continues to work through the asset quality issues and rebuilds its loss-absorbing buffers, the credit rating agency said.

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