Crisil assigns AA rating to Andhra Bank bonds

Crisil has assigned AA rating with a stable outlook to Andhra Bank’s Rs 265 crore tier-I perpetual bonds and Rs 1,000 crore upper tier-II bonds, and has reaffirmed its rating on the bank’s existing perpetual bonds.

"The rating factors in the support that Andhra Bank is likely to receive from its majority owner, the government of India, in the event of distress, the bank’s healthy asset quality, and its average resource and earning profiles. However, these rating strengths are partially offset by the bank’s moderate tier-I capital ratio, regional concentration of business, and small scale of operations," the rating agency said in a statement.