Axis Bank's USCP assigned S&P's A-1 rating

Axis Bank's proposed Rs 1,080 crore ($240 million) US commercial paper (USCP) program (BBB-/Stable/A-3) has been assigned A-1 short-term rating by Standard & Poor's (S&P) Ratings Services. A $240 million irrevocable direct-pay letter of credit issued by Citibank NA (A+/Negative/A-1) supports this program.

The USCPs constitute direct, unconditional, unsubordinated and unsecured obligations of Axis Bank. The USCP holders bear the credit risk of Citibank because the bank will pay them directly on the maturity date. The rating on this program is therefore, equivalent to the short-term counterparty credit rating on Citibank.

The rating on the USCPs will change if the short-term counterparty credit rating on Citibank changes or if the transaction structure changes materially. The USCPs will have a maximum tenure of 360 days and the bank plans to use the proceeds for general corporate purposes. Axis Bank will issue the USCPs through its Dubai International Financial Centre branch.