Moody's rates Icici bonds Baa2

Moody's Investors Service said it assigned a Baa2 rating to the up to $345 million of foreign currency perpetual non-cumulative subordinated debt to be issued by India-based Icici Bank Ltd. through its Bahrain branch. These hybrid securities are due to be recognized as tier 1 by the Reserve Bank of India, the agency said, as they are in line with the guidelines it recently issued on hybrid instruments.

The Baa2 rating is placed at the new foreign currency sovereign debt ceiling assigned to India in May as part of Moody's revised methodology. The bank's Ba2/Not Prime foreign currency deposit ratings, C- financial strength rating and Baa2 senior and subordinated debt ratings are unchanged.

The outlook is stable.

The agency said rating assigned to the new debt takes into account the bank's intrinsic financial position as reflected by its C- financial strength rating, the highest assigned to any rated Indian bank. It also reflects the bank's significant and rapidly expanding franchise in the retail sector, where it has managed to capture a large part of this fairly attractive business that is less risky within the Indian context.

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