Exim Bank's $10 bn debt programme carries moderate risk: Moody's

Moody assessed Exim on the basis of its high dependence on the Indian govt

Moody's Investors Service has assigned a medium-grade of 'Baa3' rating to Exim Bank's proposed $10 billion debt programme that carries moderate risk.

The rating outlook is positive for the proposed US dollar denominated senior unsecured notes issued by Export-Import Bank of India (Exim Bank).

On ratings rationale, the global ratings firm said: "Moody's assessment of the bank's very high dependence on, and the high probability of, support from the Government of India (Baa3 positive)."

Moody's said the rating is subject to receipt of final documentation, the terms and conditions of which will not likely change in any material way from the draft documents reviewed by it.

Instruments with Baa ratings are judged to be medium- grade and carries moderate credit risk and may have certain speculative characteristics as well.

While Fitch Ratings has rated the US dollar debt instruments of Exim Bank with an expected rating of 'BBB(EXP)' referring to a good credit quality.

Even though capacity for payment of financial commitments is considered adequate under this rating, risks remain due to adverse business or economic situations that may impair the payment capacity.

Fitch said the rating on these debt instruments are at the same level as Bank's issuer default rating (IDR) taking cue from the 'Support Rating Floor' and equated with the Indian sovereign (BBB-/stable).

"This reflects Fitch's expectation of a high propensity of extraordinary state support for Exim, which stems from its policy role and strong government linkages," it said.