Moody's assigns Baa3 to Export-Import Bank of India's notes

Moody's Investors Service ("Moody's") has assigned a Baa3 rating to the proposed USD denominated senior unsecured notes, issued by Export-Import Bank of India (EXIM India) from its US$10 billion Medium-Term Note Programme through its Head Office in India.

The bonds will be listed on the Singapore Stock Exchange.

The ratings outlook 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 rating reflects (1) the status of the proposed notes as senior unsecured obligations of the bank; (2) EXIM India's baseline credit assessment of ba2; and (3) Moody's assessment of the bank's very high dependence on, and the high probability of support from, the Government of India (Baa3 positive).

EXIM India's baseline credit assessment (BCA) of ba2 takes into account its good liquidity management, the strong and continuous capital support from the government as sole shareholder, and the bank's stable and improving profits.

On the other hand, the standalone credit profile also captures the recent stress in asset quality arising from the overall economic downturn. We expect asset quality to remain under pressure.

What Could Change the Rating - Up

EXIM India's senior unsecured debt and deposit ratings could be upgraded if the India sovereign rating (Baa3, positive) is upgraded, given our assessment of the high likelihood of government support for the firm.

Upward pressure on EXIM India's BCA could develop if there is material improvement in EXIM India's financial metrics -- including its asset quality -- which we consider highly unlikely in the next 12-18 months given the challenging economic environment.

What Could Change the Rating - Down

Downward pressure on EXIM India's BCA could develop from continued deterioration in asset quality.

Additionally, any indications that support or linkages with the Government of India had diminished or if its policy role becomes less important in the economy could put the bank's deposit and senior unsecured debt ratings under pressure.

Powered by Capital Market - Live News