Moody's gives Exim Bank's $10-bn bond issue a positive grade

Moody's has assigned a positive grade to Exim Bank's USD 10-billion medium-term bond issue.
"Moody's Investors Service (Moody's) has assigned a Baa3 rating to the proposed USD denominated senior unsecured notes issued by Export-Import Bank of India (Exim India) from its USD 10 billion medium-term note programme," Moody's said in a note today.
The bonds will be listed on the Singapore Stock Exchange.
On the rating rationale, Moody's said the assessment was based on Exim Bank's high dependence as well as high probability of support from the government.
Further, Exim Bank's baseline credit assessment takes into account its good liquidity management, strong and continuous capital support from the government as a sole shareholder, besides stable and improving profits, it added.

"On the other hand, the standalone credit profile also captures the recent stress in asset quality arising from the overall economic downturn. We expect asset quality to remain under pressure."
In addition, it said the ratings to the bond issue can be upgraded depending on assessment of a high likelihood of government support to the bank.
However, the rating could be downgraded in the event of a continued deterioration in asset quality.