Volcan has a USD 900 million loan repayable over the next three years, and if this repayment responsibility falls to Vedanta, Moody's expects its liquidity to weaken. "The transaction was not what we typically expect of high-profile Ba-rated issuers such as Vedanta, and further similar transactions could cause us to review Vedanta's governance and pressure its Ba3 rating," says Chaubal. Moody's noted that "the high-yield lite covenant package for its outstanding USD 4.2 billion bonds does not restrict similar related party investments in the future, exposing Vedanta's creditors to significant cash leakage risk". The company's cash holdings of USD 5.7 billion as of March 31, 2019 and the headroom under its debt incurrence covenant also reflect its capacity for further related party investments, if required by Volcan, it added. SID DRR