Moody's has downgraded ratings on forex debt of ICICI Bank raised through its Bahrain branch under the medium term notes programme even as it retained the ratings on the bank's foreign currency senior unsecured debt.
Moody's has downgraded ratings on forex debt of ICICI Bank raised through its Bahrain branch under the medium term notes programme even as it retained the ratings on the bank's foreign currency senior unsecured debt.
"We've downgraded the provisional ratings on the foreign currency senior unsecured MTN programme of ICICI Bank's Bahrain branch to Ba2 from Baa3, because the forex bond ceiling for Bahrain is now at Ba2," Moody's said in a note on Thursday.
"At the same time, we've retained the Baa3 rating on its foreign currency senior unsecured debt raised through this branch," Moody's said.
The city-headquartered bank declined to comment.
The branch's counterparty risk assessment has also been donwgraded to Ba1(cr)/not prime (cr) from Baa3(cr)/P-3 (cr), as the agency has downgraded the local currency country risk ceiling for Bahrain to Ba1.
"The downgrading of the provisional ratings on the foreign currency senior unsecured MTN programme for the bank's Bahrain branch to Ba2 is solely on account of the forex bond ceiling of Bahrain, which was downgraded to Ba2," it said.
Similarly, the downgrading of the branch's CRA to Ba1(cr)/NP(cr) is solely on account of the local currency country risk ceilings of Bahrain, which was downgraded to Ba1.
"All other ratings under the MTN programme of the bank remain unchanged," Moody's said, adding the outlook on all ratings is also stable.
On the ratings rationale, the agency said it has affirmed the ratings on the outstanding forex senior unsecured bonds issued by the Bahrain branch under the MTN programme at Baa3, on the basis of an irrevocable and unconditional standby letter of credit on these outstanding bonds through ICICI's Dubai branch.
"The features of the standby letter of credit satisfy the key criteria required to achieve full credit substitution.
Consequently, the ratings of these instruments are in line with the Baa3 forex senior unsecured ratings of the Dubai branch," it said.
Moody's has also affirmed the foreign currency senior unsecured debt rating of the Bahrain branch, as the only bonds outstanding are those covered by the standby letter of credit.
The bank has indicated that they will not be issuing any more bonds out of the Bahrain branch.
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