Fitch places some Adani bonds on negative watch after US bribery charges
Sign up now: Get ST's newsletters delivered to your inbox
A rating downgrade could affect the pricing of hundreds of millions of dollars worth of Adani bonds.
PHOTO: EPA-EFE
Follow topic:
Sydney/SINGAPORE - Ratings agency Fitch has put some of Adani Group’s bonds on watch for a possible downgrade after some of the firm’s key executives were indicted by US authorities on bribery charges.
Adani Energy Solutions, Adani Electricity Mumbai and some of Adani Ports and Special Economic Zone rupee and dollar bonds are now on “watch negative”, Fitch said in a statement on Nov 26.
Ratings on four Adani subsidiary senior unsecured US dollar bonds were downgraded from stable to negative, the agency said.
A ratings watch negative signals a heightened probability of a rating downgrade that could affect the pricing of hundreds of millions of dollars worth of Adani’s debt.
Fitch will monitor the US investigation for any impact on Adani’s financial position, it added in the statement.
Specifically, it would watch for “any material deterioration in near- to medium-term funding access, including their ability to roll over existing credit lines or access new facilities, as well as potentially higher credit spreads,” it said.
Rating agency S&P Global put Adani Ports, Adani Green Energy and Adani Electricity on a downgrade warning due to the US indictments.
The Monetary Authority of Singapore on Nov 25
French oil major TotalEnergies on Nov 25 said it would halt financial contributions to its Adani Group investments
India’s Andhra Pradesh state is reviewing government files and will explore if it is possible to cancel a power supply contract
US prosecutors have charged billionaire Gautam Adani, founder of the Adani Group, and seven others for their alleged roles in a US$265 million (S$357 million) scheme to bribe Indian officials to secure power-supply deals.
The Adani Group has said the accusations as well as those levelled by the US Securities and Exchange Commission in a parallel civil case were “baseless and denied” and that it would “seek all possible legal recourse”.
Adani dollar bonds steadied on Nov 26 and prices rose slightly after three days of heavy falls.
Prices on some of the more liquid Adani Ports and Special Economic Zone debts maturing between 2027 and 2041 were up between half a US cent and 1.5 US cents on the dollar. They have fallen about eight to 12 US cents since news of the indictment.
Leading ESG ratings provider Morningstar Sustainalytics said it would review Adani Green Energy’s ESG risks.
“No business, green or brown, can represent a good investment opportunity without robust governance policies and practices,” Ms Hortense Bioy, its head of sustainable investing research, said in an e-mail. REUTERS
