Moody's assigns Baa3 to Axis Bank's proposed green bond

Moody's Investors Service, ("Moody's") has assigned a Baa3 rating to Axis Bank's (Axis, Baa3, Positive) proposed USD denominated senior unsecured notes, issued under its US$5 billion Global Medium-Term Note (GMTN) program. The drawdown will be carried out from its Dubai International Financial Centre (DIFC) branch, and Axis will allocate the net proceeds from the sale of the notes for the financing of Eligible Green Projects as described in, and in accordance with, Axis' Green Bond Framework. The bonds will have a maturity of 5 years and will be listed on the Singapore Stock Exchange and the London Stock Exchange.

The outlook on the rating, where applicable, is Positive.

The senior debt rating is subject to receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed by Moody's.

RATINGS RATIONALE

The Baa3 foreign currency senior unsecured MTN debt rating is anchored on Axis' baa3 baseline credit assessment (BCA).

Axis' BCA of baa3 reflects our view of the bank's solid commercial and retail banking franchise as the third-largest private-sector bank in India. Its asset quality is pressured by the challenging macro-economic conditions and exposure to weak corporates. However, Axis retains strong buffers to mitigate the impact. Its strong performance in core profitability and capital has been better than the average of the Indian banking system. This is in part due to its weighting towards the retail sector, which underpins its strong funding profile and wider net interest margin.

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