ICRA downgrades Yes Bank's bonds as quality of large borrowers slides

Private lender Yes Bank said on Saturday that rating agency ICRA has downgraded its tier-I and tier-II bonds and infrastructure debt following deterioration in the credit quality of large ticket borrowers.

The agency downgraded the bank's tier-I bond from 'AA-minus' to 'A' and tier-II bonds from 'AA' to AA-minus.'

The outlook is negative on both bonds, the bank said.

ICRA's rating action has also factored in further weakening in core equity (CET-I) capital cushion, due to voluntary provisions and consequent losses in fourth quarter of 2018-19.

On April 26, the company reported quarterly loss of Rs 1,507 crore as compared to Rs 1,179 crore in the quarter ended March 2018. Net non-performing assets grew from 1.18 to 1.86 per cent quarter-on-quarter.

Gross slippages, or accumulation of fresh bad loans, came in at Rs 3,481 crore during the quarter ended March 31, said Yes Bank.

Of this, Rs 552 crore was due to exposure to debt-ridden and now-grounded Jet Airways. About Rs 529 crore was on account of stressed infrastructure conglomerate IL & FS.

Australian brokerage Macquarie also recently double-downgraded Yes Bank stocks to 'underperform' and cut target price by 40 per cent to Rs 165, which is one of the lowest.