S&P drops HDFC Bank's Bahrain bonds from watch list

S&P Global Ratings on Wednesday said HDFC Bank's bonds issued from its Bahrain branch were no longer under its CreditWatch, where the bonds were relegated in February with negative implications.

The rating agency's actions follow the bank's announcement that it had put in place a structure that would ensure honouring the payment obligations of the bank from its Hong Kong or India branch under an adverse event.

"We understand that HDFC Bank has already obtained specific approval from the Reserve Bank of India to make the payment for debt obligations arising on these bonds," S&P Global said in a statement issued from Singapore.

Adding there was no regulation that would bar the Hong Kong branch to make payments. "As such, we do not consider the ratings on these bonds to be constrained by the rating on the host country (Bahrain)," the statement said. HDFC Bank had raised about $1.2 billion in bonds through its Bahrain branch. S&P in February had also put ICICI Bank's $600-million bond issuance on its watch list. The rating agency also raised the Greater China regional scale rating on HDFC Bank's 150-million yuan 4.30 per cent bond maturing 2018 to 'cnA-' from 'cnBBB+', and removed the bonds from CreditWatch.