State-owned Punjab National Bank (PNB) said on Wednesday that Crisil has placed its bonds on rating watch with developing implications from the previous rating of AA-plus with a stable outlook.
This has been done on account of announcements made by the Ministry of Finance with respect to proposed amalgamation of public sector banks as there has been significant progress on the amalgamation, including approvals from the boards of the banks.
"Crisil will resolve the rating watch once clarity emerges, post-merger completion, on the merged entity's business and financial profile," PNB informed stock exchanges in regulatory filings.
Crisil will monitor for potential integration challenges and any impact on the earnings profile of the merged entity. The asset quality of the merged entity will also be monitorable.
"However, on resolution of the rating watch, the rating on the debt instruments of the merged entity is unlikely to move by more than one notch," PNB said quoting Crisil's evaluation.
At 1:20 pm, PNB shares were trading 2.7 per cent down at Rs 62.95 per unit on BSE Ltd.
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