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Fitch Rates IDBI Bank's Proposed USD Senior Debt 'BBB-(EXP)'
October 20, 2014 / 5:22 AM / 3 years ago

Fitch Rates IDBI Bank's Proposed USD Senior Debt 'BBB-(EXP)'

(The following statement was released by the rating agency) SINGAPORE/MUMBAI, October 20 (Fitch) Fitch Ratings has assigned India-based IDBI Bank Ltd's (IDBI Bank; BBB-/Stable) proposed US dollar-denominated senior unsecured debt an expected rating of 'BBB-(EXP)'. The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the issuer. They will rank pari passu among themselves and with all other unsubordinated and unsecured obligations of IDBI. The tenor of the issue is expected to be around five years and the bank plans to use all the proceeds for offshore lending activities. The notes will be issued out of the bank's Dubai branch. The final rating is subject to the receipt of final documentation conforming to information already received. KEY RATING DRIVERS The senior unsecured instruments are rated at the same level as the bank's Issuer Default Rating (IDR), in accordance with Fitch's criteria. IDBI Bank's IDR is driven by its Support Rating Floor of 'BBB-', which is higher than its Viability Rating of 'bb', and reflects Fitch's expectation of a high probability of extraordinary support from the government of India, if necessary. IDBI's systemic importance is high, which is driven by its large size and asset share, the government of India's majority shareholding (76.5% following a recent capital injection), and IDBI's role as a strategic shareholder in setting up vital financial institutions, such as ARCIL (India's first asset reconstruction company), SIDBI (SME policy bank) and CCIL (provider of clearing and settlement services). IDBI, along with other state banks, has also received regular capital injections from the government. RATING SENSITIVITIES A change in IDBI Bank's IDR will have an impact on the issue rating. IDBI Bank's other ratings are unchanged and are as follows: Long-Term IDR 'BBB-'; Outlook Stable Short-Term IDR 'F3' Viability Rating 'bb' Support Rating '2' Support Rating Floor 'BBB-' USD5bn medium-term note programme 'BBB-' SGD250m senior unsecured notes 'BBB-' CNY650m senior unsecured notes 'BBB-' CHF110m senior unsecured notes 'BBB-' USD1.35bn senior unsecured notes 'BBB-' USD300m senior unsecured notes 'BBB-' For more details on IDBI Bank's ratings and credit profile, see "Fitch Affirms Ratings on 9 Indian Banks; Pressure on Asset Quality", dated 3 September 2014 and full report titled "IDBI Bank", dated 24 March 2014, available at www.fitchratings.com. Contact: Primary Analyst Ambreesh Srivastava Senior Director +65 6796 7218 Fitch Ratings Singapore Pte Ltd. 6 Temasek Boulevard #35-04/05 Suntec Tower 4 Singapore Secondary Analyst Saswata Guha Director +91 22 4000 1741 Committee Chairperson Mark Young Managing Director +65 6796 7229 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: bindu.menon@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014, are available at www.fitchratings.com Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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