S&P rates Bank of India notes BB

Standard & Poor's said it assigned its BB issue rating to the State Bank of India's (BBB-/stable/A-3) proposed $225 million hybrid tier I perpetual notes under its $5 billion medium-term note program. The notes will be perpetual notes with a call option 10 years from the date of issue. The payment obligation shall rank junior to claims of senior and subordinated debt holders, but senior to claims of preference and equity shareholders and claims for payment of any obligation.

The rating differential between the BBB- counterparty credit rating and the BB rating on the hybrid tier I notes reflects the junior subordinated nature of the notes and the embedded interest deferral feature, the agency said.

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