homebusiness NewsIDBI Bank terminates rating agreement with S&P Global for MTN bond programme

IDBI Bank terminates rating agreement with S&P Global for MTN bond programme

"...the bank had terminated the rating engagements/agreement with S&P for various issues made under the MTN bond programme on May 21, 2021," IDBI Bank said.

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By PTI May 27, 2021 11:54:19 PM IST (Published)

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IDBI Bank terminates rating agreement with S&P Global for MTN bond programme
IDBI Bank has terminated rating engagements with global rater S&P for issues under MTN (medium-term note) bond programme.

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S&P Global Ratings has affirmed its 'BB' long-term and 'B' short-term foreign currency issuer credit ratings on IDBI Bank with a negative outlook, the bank said in a regulatory filing. It has also affirmed the 'BB' programme rating on senior secured notes under its MTN programme, it added.
"However, as the MTN bonds rated by S&P were fully repaid on November 30, 2020, the bank had terminated the rating engagements/agreement with S&P for various issues made under the MTN bond programme on May 21, 2021," IDBI Bank said.
Among others, the bank said the rater has revised upwards their assessment of the bank's stand-alone credit profile (SACP) to 'b+' from 'b-'.
Also, S&P has lowered their assessment of the likelihood of extraordinary government support to high from very high, in view of likely divestment by government, as per budgetary announcement, it said.
In its rating rationale, S&P said the agency has affirmed it as it expects the improving financial performance of the lender to offset the risk of its weakening link with the government.
"The impending divestment of the majority government-owned bank could reduce the likelihood of external support, in our view," said the rater.
IDBI Bank is now has a majority holding by LIC at 49.24 percent stake. The government owns 45.48 percent, thus taking the promoter shareholding to a total of 94.71 percent.
Earlier this month, the government gave in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank without specifying the quantum to be sold. IDBI Bank stock closed 0.13 per cent up at Rs 38.65 apiece on the BSE.

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