S&P: Indian Overseas Bank notes at BBB-, BB+ and BB

Standard & Poor's said that it had assigned a BBB- rating to the senior notes, BB+ rating to the lower tier II subordinated notes, BB rating to the upper tier II subordinated notes and BB rating to the hybrid tier I notes under the multi-currency $1 billion medium-term notes program by Indian Overseas Bank (BBB-/stable/A-3).

The bank's recently announced senior notes issuance under the program is also rated BBB-.

The senior notes will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank, the agency said. They shall at all times rank pari passu among themselves and equally with all other obligations.

The rating on the senior notes is the same as the long-term counterparty credit rating on the bank. The BB+ rating on the program's lower tier II subordinated notes reflects the subordinate ranking of the notes to the bank's senior unsecured debt, the agency said.

The differential between the BBB- counterparty credit rating and BB rating on the upper tier II and hybrid tier I notes reflects the subordinated nature of the notes, the agency added. It also reflects the embedded interest deferral feature, which is linked to compliance with the capital-to-risk-assets ratio requirement and a profit test.

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