Rating agencies assign investment grade to SBI bond programme

They will at all times rank pari passu among themselves and with all other unsubordinated and unsecured obligations of State Bank of India, it said, adding that the tenor of the issue is expected to be around five years.

S&P Global Ratings assigned 'BBB-' long-term issue rating to the proposed issue of SBI's senior unsecured notes.

The rating on the notes reflects the long-term counterparty credit rating on SBI, S&P said in a statement.

According to Moody's SBI's final Baa3 rating incorporates a one-notch uplift due to its assumption of the bank's very high level of support from the Indian government in a stressed situation.

The assumption of high support is based on a combination of its large size and critical role in India's payment system, representing around 16.3 percent of system loans and 17.6 percent of system deposits as of end-March 2016, its nationwide reach, and the government's 60.18 percent stake in SBI.

SBI last raised funds by issuing dollar denominated bonds worth USD 300 million (about Rs 2,000 crore) in September, 2016. It concluded AT1 Basel III compliant non-convertible, perpetual non call 5 year subordinated, unsecured note or bonds at a coupon 5.5 percent payable semi-annually under USD 10 billion RegS MTN Programme.