Fitch Rates IDBI Bank's Proposed Senior Debt 'BBB-(EXP)'
The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the issuer. They will at all times rank pari passu among themselves and with all other unsubordinated and unsecured obligations of IDBI Bank.
The tenor of the issue is expected to be around three to five years and the notes are to be issued by IDBI Bank's Dubai International Financial Centre branch.
The final rating is subject to the receipt of final documentation conforming to information already received.
KEY RATING DRIVERS - SENIOR DEBT
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 (SRF) 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 relatively large size and asset share, the government's 76.5% stake, and IDBI's role as a strategic shareholder in setting up vital financial institutions and policy banks. IDBI, along with other state banks, has also received regular capital injections from the government.
RATING SENSITIVITIES - SENIOR DEBT
Any change in the factors underpinning IDBI Bank's systemic importance will warrant a re-assessment of the SRF, which currently drives the IDR. Any change in IDR will also have an impact on the securities' rating.
IDBI Bank's other ratings are unchanged and are as follows:
- Long-Term IDR at 'BBB-'; Outlook Stable
- Short-Term IDR at 'F3'
- Viability Rating at 'bb'
- Support Rating at '2'
- Support Rating Floor at 'BBB-'
- USD5bn medium-term note programme at 'BBB-'
- USD2bn senior unsecured notes at 'BBB-'
For more details on IDBI Bank's ratings and credit profile, see "Fitch Affirms Ratings on 9 Indian Banks; Downgrades PNB's VR", dated 31 August 2015, and "IDBI Bank Ltd. - Ratings Navigator", dated 14 October 2015, available at www.fitchratings.com.