S-P Global Ratings has downgraded Future Retail Limited's long-term issuer credit ratingNew Delhi: S-P Global Ratings on Wednesday downgraded Future Retail Limited's long-term issuer credit rating from 'CCC-' to 'SD' after the company failed to repay the principal on its debt.Future Retail failed to make the principal payments due on its restructured domestic bank borrowings on December 31, 2021.

The 30-day review period (grace period to pay) allowed by the Reserve Bank of India (RBI) has ended, S-P said in a statement.Principal repayment of about Rs 3,500 crore was due on December 31, 2021, on the company's bank borrowings as part of a one-time restructuring plan implemented by the onshore lenders in April 2021.

The company was allowed a review period of 30 days to cure the default.Future Retail failed to cure the default amid an unsuccessful attempt to monetise its small-format stores and insufficient cash flows to meet the sizable repayment obligation, the rating agency said."We, therefore, lowered our long-term issuer credit rating on Future Retail to 'SD' from 'CCC-'," it said."We affirmed our 'CCC-' long-term issue rating on Future Retail's US dollar-denominated senior secured notes because we expect the company to service the semi-annual coupon within the grace period."Future Retail, which has about 1,388 stores across more than 400 cities, is embroiled in a legal dispute with Amazon that has stalled billionaire Mukesh Ambani's Reliance group from acquiring the retail and wholesale as well as the logistics and warehousing business of Future Group.S-P said it affirmed the issue rating on Future Retail's USD 500 million senior secured notes because it expected the company to service the semi-annual coupon during the 30-day grace period -- in line with past trends.The coupon was due on the notes on January 24, 2022.