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| Moody's assigns 'Baa3' to IDBI's US dollar denominated bonds |
| Press Trust of India / New Delhi Jul 30, 2010, 17:50 IST |
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Credit ratings agency Moody's today assigned a stable outlook rating to state sector lender IDBI Bank's US dollar denominated bonds on the back of its relatively good financial and liquidity situation.
Assigning a 'Baa3' rating, which suggests moderate credit risk, Moody's said that the bank's capitalisation level is expected to improve once the government injects the anticipated Rs 3,000 crore into it.
"Moody's Investors Service has today assigned a Baa3 rating to IDBI Bank's US dollar-denominated senior unsecured bonds, to be issued through its branch in the Dubai International Financial Centre," Moody's said.
IDBI Bank will be issuing the US dollar denominated bonds as part of its $1.5 billion medium term note programme to fund its business. While the bank is yet to determine the issuance amount, the maturity period of the bonds will be five-and-a-half years.
"This debt issuance is rated at Baa3, at the same level as IDBI Bank's senior-most rating -- its global local currency deposit rating -- with a stable outlook," Crisil said.
The ratings agency said that IDBI Bank has taken steps to expand its branch network and attract higher portions of low- cost deposits.
"Its capitalisation level is expected to improve with the anticipated Rs 30 billion capital injection from the Government of India," it said.
Stating that the public sector bank is in a good financial position, Moody's added: "IDBI Bank's full-year results indicate an improved financial position, with growing loans and deposits, and rising profitability."
Moody's, however, had a word of caution for the bank on its weakening asset quality and low returns for them.
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