Fitch Rates Axis Bank's Proposed Senior Debt '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 Axis Bank.
The tenor of the issue is expected to be around five years and the notes are to be issued by Axis Bank's Dubai International Financial Centre (DIFC) branch.
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.
Axis Bank's Issuer Default Rating (IDR) of 'BBB-' is driven by its Viability Rating (VR) of 'bbb-', which denotes its standalone creditworthiness. The VR reflects the strength of its franchise, satisfactory asset quality, improved capitalisation and growing profitability. Axis Bank's increased focus on retail customers has helped it to diversify its loan and funding mix, and reduce concentration risks.
Axis Bank is the third-largest private bank in India by asset size and Fitch expects there will be moderate probability of support from the state, if required, as reflected in its Support Rating of '3' and Support Rating Floor of 'BB+'.
RATING SENSITIVITIES
A change in Axis Bank's IDR will have an impact on the securities' rating.
Axis Bank's other ratings are unchanged and are as follows:
Long-Term IDR 'BBB-'; Outlook Stable
Short-Term IDR 'F3'
Viability Rating 'bbb-'
Support Rating '3'
Support Rating Floor 'BB+'
EUR3bn medium-term note programme 'BBB-'
USD1.6bn senior unsecured notes 'BBB-'
For more details on Axis Bank's ratings and credit profile, see "Fitch Affirms Ratings on 9 Indian Banks; Pressure on Asset Quality", dated 3 September 2014, full report titled "Axis Bank", dated 31 July 2014, and "Axis Bank Ltd. - Ratings Navigator", dated 12 September 2014, available at www.fitchratings.com.
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