Global rating agency Standard & Poor's today assigned 'BB' rating, indicating non-investment grade, to the State Bank of India's proposed $225million (about Rs 900 crore) Hybrid Tier I perpetual bonds. | |
| The bonds would be issued under $5 billion (about Rs 20,000 crore) medium term notes (MTN) programme, Standard & Poor's said in a statement. They would be perpetual notes and consist of 10-years call option from the date of issue. |
| |
| The rating differential between the 'BBB-' counter-party credit rating and the 'BB' rating on the Hybrid Tier I notes reflects the notes' junior subordinated nature and interest deferral. |
| |
| The interest deferral feature is linked to comply with the regulatory capital adequacy ratio (RCAR) and profit test. If SBI's RCAR were below the minimum regulatory requirements stipulated by the Reserve Bank of India (RBI), it would have to mandatorily skip interest payments. |
| |
|
| |
