S&P lowers Bank of India hybrids, stand-alone rating

Standard & Poor’s said it affirmed the BBB- long-term and A-3 short-term issuer credit ratings on Bank of India.

The outlook is stable.

S&P also said it affirmed the BBB- long-term issue ratings on the outstanding senior unsecured notes of the bank.

The agency also said it lowered the long-term issue ratings on Bank of India’s Basel II compliant hybrid notes (upper tier 2 subordinated and hybrid tier 1 notes) to B+ from BB.

S&P also said it affirmed the BBB- long-term and A-3 short-term issuer credit ratings on Bank of India (New Zealand) Ltd.

The outlook is stable.

The ratings reflect Bank of India’s sound franchise and business diversity and a very high likelihood of government support, the agency said.

The ratings also consider a one-notch uplift because the government of India is expected to provide timely and sufficient extraordinary support to the bank if it comes under financial distress, S&P said.

The downgrade takes into account the bank’s asset quality to remain weak over the next 12 months, the agency said. That also led to the downgrade of the bank’s stand-alone credit profile to BB+ from BBB-.

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