Credit rating lowered after Indian telco’s lenders give it more time to repay debts.

More bad news came for Reliance Communications (RCom) late on Tuesday when Fitch and Moody’s again cut its credit ratings.

RCom said in a stock exchange filing that the downgrades were made following its announcement late last week that lenders have agreed to give it until December to repay some of its debts.

That resulted in Fitch lowering its long-term foreign and local-currency issuer default ratings from CCC, which means default is a real possibility, to ‘RD’, which stands for ‘restricted default’.

Fitch also lowered RCom’s bond rating from CCCR4 to CR4. RR4 is effectively a score that rates a bondholder’s chances of recovering their investment in the case of default. A score of RR1 is outstanding, while RR6 is poor. RR4 is average. Cutting it from CCC to C, means the risk of bond default has gone from high, to imminent.

Meanwhile, Moody’s revised its corporate family rating and senior secured bond rating from Caa1, which means a company is vulnerable to missing its debt obligations, to Ca, which means a company in highly-vulnerable to missing its debt obligations.

RCom reiterated that it is due to repay 250 billion rupees (€3.45 billion) of its INR443.45 billion net debt by 30 September, following the sale of a majority stake in its towers business to Brookfield Infrastructure Group, and the merger of its mobile business with Aircel.

"Based on the large number of approvals already received for the two transactions and continuing good progress for the balance, the company expects to meet its all debt repayment obligations in line with these plans," it said.