Moody's assigns Baa2 rating to Syndicate Bank's MTN issue

Moody’s Investors Service has assigned a Baa2 rating to Syndicate Bank’s proposed issuance of long-term senior unsecured notes under its $1 billion Medium Term Note (MTN) programme. The long-term notes will be denominated in USD and issued by the London Branch of Syndicate Bank. The rating outlook is negative.

Moody's Investors Service has a standalone bank financial strength rating (BFSR) of D+ for Syndicate Bank, mapping to a baseline credit assessment (BCA) of ba1 on the long-term scale. The BFSR outlook is negative.

”We believe that the probability of systemic support for Syndicate Bank is very high from the Indian government in an event of a systemic crisis. The Indian government has in the past supported Indian public sector banks, including Syndicate Bank, by infusing equity and providing liquidity support when required. Therefore, the long-term local currency deposit and foreign currency senior unsecured debt ratings receive a two-notch rating uplift from its BCA.”

The foreign currency senior unsecured debt rating is at Baa2. The rating outlook is negative.

The negative rating outlook factors in the increasingly challenging operating environment for Indian banks. As Syndicate Bank has a weaker franchise than other Indian banks rated Baa2 by Moody’, its rating is more vulnerable to potential deterioration in financial strength in the current environment. “e believe the bank’ franchise is weaker than other

"Indian banks rated Baa2 and is unlikely to significantly change over the next few quarters,” it said.