Moody’s: State Bank of India debt B1 (hyb)

Moody's Investors Service said it assigned a B1 (hyb) rating to State Bank of India's (SBI) dollar-denominated noncumulative non-convertible perpetual capital securities.

The securities are issued under the bank’s $10 billion medium-term note program, via its Dubai International Financial Centre Branch.

The terms and conditions of the capital securities incorporate Basel III-compliant non-viability language in accordance with Reserve Bank of India (RBI) guidelines, and will qualify as regulatory Additional Tier 1 (AT1) capital securities.

The rating is positioned three notches below the bank's adjusted baseline credit assessment of ba1, in accordance with Moody's standard notching guidance for contractual non-viability preferred securities with an optional, noncumulative distribution-skip mechanism.

The three-notch difference from the adjusted baseline credit assessment reflects the probability of impairment associated with noncumulative coupon suspension, as well as the likelihood of high loss severity when the bank reaches the point of non-viability, the agency said.

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