Ratings agency Moody's Investors Service on Tuesday assigned a 'Baa2' rating with a stable outlook to the proposed dollar-denominated senior unsecured bonds to be issued by Reliance Industries Ltd (RIL).
On Saturday, RIL had said that its board had approved raising up to $5 billion in one or more tranches through issuance of senior unsecured US dollar denominated fixed rate notes. The proceeds from the issuance of the notes will be utilised primarily for refinancing of existing borrowings, it said.
"RIL's Baa2 ratings reflect the company's large scale and dominant market position across its diverse businesses, its management's strong execution track record and our expectation that its credit metrics will remain strongly positioned for its Baa2 rating, despite its planned investments in clean energy and other business segments," Moody's Analyst Sweta Patodia said.
The company's high dependence on the Indian economy through its digital services and retail businesses constrains its rating to one notch above that of the Indian sovereign rating, she added.
The ratings agency said that RIL's recent announcement to increase tariffs for its digital services business is positive for the telecommunications industry, while the easing of pandemic-related disruptions will support demand for oil and gas as well as increase consumer spending.
"These trends bode well for RIL's various business segments and will keep earnings strong over the next 12-18 months," it said.
The stable outlook reflects Moody's expectation that the company's earnings will continue to improve over the next 12-18 months across all its business segments, such that its credit metrics will remain strongly positioned for its ratings, it added.
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