Moody's upgrades Yes Bank rating following equity capital raise of Rs 150 bn

Moody's Investors Service has upgraded Yes Bank Limited's long-term foreign currency issuer rating to B3 from Caa1. Moody's has also upgraded the bank's long-term foreign and local currency bank deposit ratings to B3 from Caa1, and its foreign currency senior unsecured MTN program rating to (P)B3 from (P)Caa1.

In addition, Moody's has upgraded the bank's long-term local and foreign currency Counterparty Risk Ratings (CRR) and long-term Counterparty Risk (CR) Assessment to B3 from Caa1 and B3(cr) from Caa1(cr) respectively.

At the same time, Moody's has upgraded Yes Bank's Baseline Credit Assessment (BCA) and Adjusted BCA to caa2 from ca.

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The outlook on Yes Bank's ratings where applicable is changed to stable from positive. For a detailed list of the affected ratings for both Yes Bank Limited and Yes Bank, IFSC Banking Unit Branch, please refer to the end of this press release.

Ratings Rationale

Yes Bank's successful equity capital raise of Rs150 billion (about $2 billion) has bolstered its solvency and is the main driver of the ratings upgrade. Following the capital increase, the bank's Common Equity Tier 1 ratio will more than double to 13.4 per cent from 6.6 per cent based on the bank's capital position at the end of June 2020, bringing its capitalization largely in line with its private sector peers.

The successful equity raising showcases Yes Bank's regained access to external market funds, which is a result of its improving financial strength and will support depositor confidence.