Moody’s assigns Ba3 rating to Tata Motors’ proposed senior unsecured notes with outlook negative

Singapore, Nov 12 : Moody’s Investors Service said on Tuesday it has assigned a Ba3 rating to the proposed senior unsecured notes to be issued by Tata Motors Ltd (TML).

The rating outlook is negative. The proposed notes rank pari passu (on equal footing) with TML’s existing senior unsecured notes and are therefore rated at the same level as these notes and TML’s Ba3 corporate family rating. “The Ba3 ratings reflect TML’s leading market position in commercial vehicles in India, 100 per cent ownership of the premium and luxury car manufacturer Jaguar Land Rover (JLR) Automotive Plc and ownership by Tata Sons, which results in a one-notch uplift, reflecting our expectation of continued parental support when needed,” said Kaustubh Chaubal, a Moody’s Vice President and Senior Credit Officer.

On October 25, TML announced that it will make a preferential allotment of equity shares and convertible warrants to Tata Sons for a 914 million dollar equity injection of which 548 million dollars will be paid immediately and the balance over a period of 18 months.

Pro-forma the preferential allotment and the conversion of the warrants, Tata Sons’ shareholding in TML will increase to 46.4 per cent from the current 38.4 per cent.
“We view the preferential allotment as a credit positive because TML plans to apply the proceeds towards reducing its debt,” added Chaubal.

“The equity injection also reflects Tata Sons’ continued support, and will somewhat reduce the pressure on TML’s balance sheet stemming from the weak operating performance of its India business even as JLR delivers some improvement.” However, TML’s operations excluding JLR — in particular commercial and passenger vehicles in India — face acute challenges with sluggish economic growth, weak liquidity, tight financing norms and low rural income negatively affecting consumer sentiment.

TML’s passenger vehicle sales volumes declined by 41 per cent in the first half of the fiscal year ending March 2020 while commercial vehicle volumes declined by 29.5 per cent over the same period.

On November 7, Moody’s changed its outlook on India’s sovereign ratings to negative from stable, reflecting increasing risks that the country’s economic growth will remain materially lower than in the past.

While government measures to support the economy should help to reduce the depth and duration of India’s growth slowdown, prolonged financial stress among rural households, weak job creation and more recently a credit crunch among non-bank financial institutions have increased the probability of a more entrenched slowdown.

Therefore, although TML will likely deliver slightly better volumes in H2 fiscal 2020 as festive demand picks up, Moody’s remains sceptical about the long-term impact of short-term government stimulus measures for the auto industry.

TML is the largest manufacturer of commercial vehicles and passenger vehicles in India. The company’s products include light, medium and heavy vehicles like trucks, pick-ups and buses, utility vehicles and passenger cars.

The post Moody’s assigns Ba3 rating to Tata Motors’ proposed senior unsecured notes with outlook negative appeared first on Digpu News Network.

More News From E-rumor Mill

Streep, Miranda and Stone are named as Met Gala co-0chairs

Dec 8, 2019

NEW YORK — Next year's Met Gala may be the closest we'll ever come to getting a Miranda Priestly moment at the starry event. Meryl Streep has been named as a co-chair of the Metropolitan Museum of Art's Costume Institute. The Oscar-winner played Priestly, a thinly veiled fictional version of Vogue editor Anna Wintour, in the movie "The Devil Wears Prada." Wintour clearly has no hard feelings because she selected Streep as a co-chair along with Lin-Manuel Miranda and fellow Oscar-winner Emma Stone. Designer Nicolas Ghesquiere rounds out the group. The gala's theme is "About Time: Fashion and Duration," which...

ABC says interview with Epstein accuser wasn't ready to air

Dec 8, 2019

NEW YORK — ABC News faced questions Tuesday about its reluctance to air a sensitive story of alleged sexual misconduct after a leaked video emerged of reporter Amy Robach complaining about how her bosses handled an interview with a Jeffrey Epstein accuser. The conservative web site Project Veritas released video of Robach venting that "every day I get more and more pissed" that her 2015 interview with Virginia Giuffre never made the air. Robach made her remarks late in August while sitting in a Times Square studio with a microphone but not on the air. ABC said Tuesday that the...

Olivia Newton-John's final 'Grease' ensemble fetches $405K

Dec 8, 2019

BEVERLY HILLS, Calif. — Two collectors said you're the one that I want to Olivia Newton-John's iconic "Grease" leather jacket and skintight pants at an auction Saturday in Beverly Hills. Julien's Auctions says the combined ensemble, which Newton-John's character Sandy wears in the closing number of the 1978 film, fetched $405,700 total. The leather jacket sold for $243,200 and the pants, which Newton-John famously had to be sewn into, went for $162,500. Other "Grease" memorabilia included a Pink Ladies jacket that went for $50,000 and a poster signed by Newton-John, John Travolta, director Randal Kleiser and producer and songwriter John...

Scorsese, De Niro and Pacino on time and 'The Irishman'

Dec 8, 2019

NEW YORK — They come into the room not like the moveable Mount Rushmore that they are but like three old friends, energized by being in each other's company. They are chatting about movies. Martin Scorsese comes first, then Al Pacino, then Robert De Niro. They're trailed by a small army of publicists and assistants that quickly recedes out of the room. Constant through the momentary commotion is Scorsese enthusiastically remembering Michael Powell and Emeric Pressburger's "A Matter of Life and Death," and quoting its lines to a rapt Pacino. Their movie, "The Irishman," also deals majestically with matters of...

After son's death, Craig Morgan finds God's purpose in song

Dec 8, 2019

NASHVILLE, Tenn. — The last evening that country singer Craig Morgan spent with his 19-year-old son, Jerry, was during one of Morgan's performances at Grand Ole Opry three years ago. "The last pictures I have of us together is on that stage," Morgan, 55, said backstage at the Opry House this week. "So this is a very special place. It was anyway before, but now it has additional meaning, knowing this is where we hung out together." His son, Jerry, who was home visiting from college, died in a drowning accident on Kentucky Lake in July 2016. Three years later,...

Sign up now!

About Us

Who doesn’t love gossip? E-Rumor Mill grinds the news and gossip to keep reader's well-entertained.

Contact us: sales[at]e-rumormill.com

Subscribe Now!

Quick Links

HomePress