Fitch Ratings has assigned India-based Muthoot Finance Ltd's (MFL, BB/Stable) USD650 million 7.125% senior secured bonds due 2028 a final rating of 'BB'.

This follows the receipt of final documentation conforming to information previously received. The final rating is in line with the expected rating assigned on 18 April 2024.

The bonds carry a fixed-rate coupon payable semi-annually and are secured by collateral that includes specified assets and receivables of the issuer. The bonds are also subject to maintenance covenants that require MFL to meet regulatory capital requirements, and ensure its security coverage ratio is equal to or greater than 1x at all times.

The bonds are issued in the international market under the Reserve Bank of India's external commercial borrowings framework. They are issued under MFL's USD2 billion global medium term-note programme.

Key Rating Drivers

MFL's bonds are rated at the same level as its Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BB', in accordance with Fitch's rating criteria.

Most of MFL's debt is secured and Fitch believes that non-payment of the company's senior secured debt would best reflect uncured failure of the entity. MFL can issue unsecured debt in the overseas market, but such debt is likely to constitute a small portion of its funding and thus cannot be viewed as its primary financial obligation.

For more information on MFL's key rating drivers and rating sensitivities, please see Correction: Fitch Affirms Muthoot Finance at 'BB'; Outlook Stable


Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Any negative action on MFL's Long-Term Foreign-Currency IDR would drive similar action on the bond rating.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

An upgrade of MFL's Long-Term Foreign-Currency IDR would result in corresponding action on the bond rating.

Date of Relevant Committee

01 September 2023


The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

MFL has an ESG Relevance Score of '3' for Customer Welfare, compared with the standard score of '2' for the finance company sector. This reflects its retail-focused operations, which expose it to risks around fair lending practices, pricing transparency, repossession, foreclosure and collection practices, whereby aggressive practices in these areas may subject the company to legal or regulatory and reputational risk that may damage its credit profile. The score of '3' for this factor reflects our view that such risks are adequately managed and have a low impact on the company's credit profile.

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision For more information on Fitch's ESG Relevance Scores, visit

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