Moody's rates Axis Bank bonds Baa2

Moody's Investors Service said it assigned a Baa2 rating to the dollar-denominated senior unsecured bonds to be issued by Axis Bank Ltd. through its €2 billion updated medium-term note program.

The bonds will be issued through the bank's Dubai International Financial Centre branch. The exact amount of the issuance has yet to be decided but is likely to be between $300 million to $500 million, the agency said. This issuance was initially planned for October 2009, but was delayed due to market conditions.

The rating is derived from Axis Bank's C- bank financial strength rating, which incorporates the bank's stand-alone financial strength, Moody's said. That rating is mainly based on the bank's good and rapidly growing domestic franchise as the third largest private-sector bank in India, the agency said.

The rating also reflects the bank's comfortable liquidity position, strong capitalization levels following a recent equity issue of around $808 million and satisfactory recurring profitability driven by robust fee income that comprises more than 36% of the bank's core operating revenue, Moody's said.

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