Moody's places Tata Steel's credit rating on watch
International agency Moody's on Monday placed the credit rating of India's blue chip company Tata Steel on watch with the possibility of a downgrade on increasing demands from its European subsidiary Tata Steel UK.
By PTI |
NEW DELHI: International agency Moody's on Monday placed the credit rating of India's blue chip company Tata Steel on watch with the possibility of a downgrade on increasing demands from its European subsidiary Tata Steel UK.
The corporate family rating of Tata Steel has been placed on review for possible downgrade, Moody's Investors Service said in a release.
The rating action, it added, follows the rating downgrade of Tata Steel UK (formerly Corus) to Ba1, indicating speculative grade rating.
In its review, Moody's said, the agency "will assess the impact on Tata Steel's financial profile stemming from the requirement to continue supporting Tata Steel UK's liquidity and covenant compliance management in light of severe deterioration in market conditions."
It further said that as Tata Steel UK accounts for a substantial proportion of Tata Steel's operations, continued deterioration in the financial profile of the European subsidiary could lead to further support requirement from the Indian operations.
The requirement of funds by the European subsidiary, it added, "may weaken Tata Steel's financial flexibility to levels below the Ba1 rating (which is an speculative grade rating)".
The corporate family rating of Tata Steel has been placed on review for possible downgrade, Moody's Investors Service said in a release.
The rating action, it added, follows the rating downgrade of Tata Steel UK (formerly Corus) to Ba1, indicating speculative grade rating.
In its review, Moody's said, the agency "will assess the impact on Tata Steel's financial profile stemming from the requirement to continue supporting Tata Steel UK's liquidity and covenant compliance management in light of severe deterioration in market conditions."
It further said that as Tata Steel UK accounts for a substantial proportion of Tata Steel's operations, continued deterioration in the financial profile of the European subsidiary could lead to further support requirement from the Indian operations.
The requirement of funds by the European subsidiary, it added, "may weaken Tata Steel's financial flexibility to levels below the Ba1 rating (which is an speculative grade rating)".
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