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Moody’s Withdraws Reliance Communications’ Corporate Family Rating Due To Default

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Moody's Investors Service has withdrawn debt-laden Reliance Communications Ltd.'s corporate family rating, citing a missed scheduled payment related to the company’s dollar bonds.

"Moody's has today withdrawn Reliance Communications' Ca corporate family rating and its negative outlook. At the same time, Moody's has also withdrawn the Ca rating on RCom's senior secured notes," the rating agency said in a statement.

Also Read: As Shares Of RCom Fall, Lenders Face Tough Choices

According to Moody's website, a corporate family rating applies to all affiliates under the management control of an entity to which it is assigned, whereas obligations rated 'Ca' are highly speculative and are likely in, or very near, default.

The rating withdrawal follows a default on interest payment on a foreign bond.

"The semi-annual interest payment on its $300 million senior secured bond was due on November 6, 2017. According to the indenture, the company had a seven-day grace period, after which an event of default would occur," Moody’s said.

Moody's said it withdrew the ratings as it considers a missed scheduled payment either of interest or principal as a "default".

Earlier this month, RCom had said the company is not paying interest or principal amount for the time being to any lenders or its bondholders in view of the strategic debt restructuring scheme and debt standstill period till December 2018.

The loss-making company, which has already announced shutting down of its 2G and 3G mobile telephony business by November 30, is saddled with Rs 44,300 crore debt.

Also Read: RCom Arm Sends Notice To Rivals For Campaign Against It

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