New Delhi: The credit rating of Indiabulls Housing Finance (IHFL) has been downgraded with a negative outlook by global rating agency Moody’s.
The international agency said there are challenges for IHFL in raising funds. Moody’s downgraded the corporate family rating (CFR) and foreign-currency senior secured rating of IHFL to B3 from B2.
Moody’s also downgraded the foreign and local currency senior secured MTN programme ratings of IHFL to (P)B3 from (P)B2. It anticipates the asset quality of IHFL to continue to weaken.
“The downgrade and negative outlook reflect our expectation that Indiabulls’ access to funding will remain challenging for longer than expected…. There is significant uncertainty around when Indiabulls will regain access to market funding,” Moody’s said in a statement.
Moody’s also said that IHFL’s reliance on asset sales as the primary source of liquidity to repay maturing obligations will increase.
IHFL’s loan book has been shrinking since December 2018. New disbursements have also shrunk significantly.
“As a result, Indiabulls’ profitability will reduce because of lower net interest margins and higher cost-to-income ratios,” Moody’s said.