Contact Your Financial Adviser Money Making MC
22
January 2018
 |
Moody's(The Total Investment & Insurance Solutions)
Moody's
Investors Service has assigned a Baa3 rating to Yes Bank Limited's proposed
senior unsecured notes, issued under its USD1 billion Medium Term Note (MTN)
program. The Total Investment & Insurance
Solutions
The drawdown is from its IFSC Banking Unit Branch in Gujarat International Finance Tec-City (GIFT city), and will be listed on the London Stock Exchange International Securities Market, the Singapore Exchange Securities Trading Limited, and the India International Exchange IFSC Ltd.
The rating outlook is stable.
The senior unsecured rating is subject to receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed by Moody's.
Ratings Rationale
The drawdown is from its IFSC Banking Unit Branch in Gujarat International Finance Tec-City (GIFT city), and will be listed on the London Stock Exchange International Securities Market, the Singapore Exchange Securities Trading Limited, and the India International Exchange IFSC Ltd.
The rating outlook is stable.
The senior unsecured rating is subject to receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed by Moody's.
Ratings Rationale
The Baa3 rating for the senior unsecured notes incorporates the bank's ba1 baseline credit assessment (BCA) and Moody's expectation of a moderate probability of systemic support from the Indian government (Baa2 stable), if needed. The Total Investment & Insurance Solutions
Yes Bank's BCA of ba1 reflects the following factors when compared with other Moody's-rated Indian banks: the bank's superior asset quality metrics, consistent profitability, and small but rapidly growing franchise. The bank's BCA also reflects its comparatively weaker but improving funding profile.
Moody's assessment of a moderate probability of support from the Indian government to Yes Bank in the event of financial distress takes into consideration Yes Bank's modest but growing market share and its relative importance to India's banking system. As of December 2017, Yes Bank demonstrated a 2.1% and a 1.5% share of system loans and deposits, respectively. The Total Investment & Insurance Solutions
What could change the ratings – up
Upward pressure on the BCA could develop if Yes Bank maintains its current asset-quality ratios while reducing its credit risk concentration to large borrowers; the bank's funding profile improves, for example, by growing its proportion of CASA/total deposits to be in line with the industry average, without adversely affecting its net interest margin; and the bank sustains its profitability and maintains adequate loss-absorbing buffers.
What could change the ratings – down
A downward revision of the sovereign rating could also lead to a downgrade in Yes Bank's deposit rating. The Total Investment & Insurance Solutions
Downward pressure on the bank's BCA could develop from a sustained deterioration in impaired loans or loan-loss reserves, or if the rate of new NPL formation is significantly higher than previously experienced; or (2) a decline in earnings, which would lead to a significant decrease in internal capital generationThe Total Investment & Insurance Solutions
No comments:
Post a Comment