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Fitch Rates Bank of Baroda's Proposed Senior Unsecured Debt 'BBB-(EXP)'
July 8, 2014 / 4:31 AM / 3 years ago

Fitch Rates Bank of Baroda's Proposed Senior Unsecured Debt 'BBB-(EXP)'

(The following statement was released by the rating agency) MUMBAI/SINGAPORE, July 08 (Fitch) Fitch Ratings has assigned India-based Bank of Baroda's (BOB) proposed US dollar-denominated senior unsecured debt an expected rating of 'BBB-(EXP)'. The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the issuer. They will at all times rank pari passu among themselves and with all other unsubordinated and unsecured obligations (other than subordinated obligations) of BOB. The tenor of the issue is expected to be around five years and the bank plans to use all the proceeds for offshore lending activities. The final rating is subject to the receipt of final documentation conforming to information already received. KEY RATING DRIVERS The senior unsecured instruments are rated at the same level as the bank's Issuer Default Rating (IDR), in accordance with Fitch's criteria. BOB's IDR (BBB-/Stable) is driven by its Support Rating Floor of 'BBB-' - which is higher than its Viability Rating of 'bb+' - and reflects Fitch's expectation that the government of India would continue to have a high propensity to extend extraordinary support, should there be a need. BOB's systemic importance is high given its position as India's second-largest state-owned bank (56.3% state shareholding as at end-March 2014), high share of system assets and deposits (around 6%) and wide-reaching pan-India presence (close to 5,000 branches). BOB, along with other state banks, has also received regular capital injections from the government. Between FY10-FY14, it received total funds of around INR55bn (USD 920m) from the government and Life Insurance Corporation of India, which is wholly owned by the government and is India's largest life insurer. RATING SENSITIVITIES A change in BOB's IDR will have an impact on the securities' rating. BOB's other ratings are not affected and are as follows: Long-Term IDR 'BBB-'; Outlook Stable Short-Term IDR 'F3' Viability Rating 'bb+' Support Rating '2' Support Rating Floor 'BBB-' USD 3bn medium-term note (MTN) programme 'BBB-' USD 500m senior unsecured notes under the MTN programme 'BBB-' USD 350m senior unsecured notes under the MTN programme 'BBB-' USD 750m senior unsecured notes under the MTN programme 'BBB-' USD300m Upper Tier 2 notes 'B+' For more details on BOB's ratings and credit profile, see full report titled 'Bank of Baroda', dated 15 April 2014, available at www.fitchratings.com. Contact: Primary Analyst Ambreesh Srivastava Senior Director +65 6796 7218 Fitch Ratings Singapore Pte Ltd. 6 Temasek Boulevard #35-04/05 Suntec Tower 4 Singapore Secondary Analyst Saswata Guha Director +91 22 4000 1741 Committee Chairperson Mark Young Managing Director +65 6796 7229 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: bindu.menon@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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