Fitch rates Industrial Development Bank debt AA+

Fitch Ratings said it assigned an AA+(ind) rating to the proposed Rs.30 billion debt (senior and lower tier 2 subordinated bonds) to be issued by Industrial Development Bank of India Ltd., under its omnibond program during the year ended March 2008. The agency also assigned an AA(ind) rating to the proposed Rs.15 billion upper tier 2 subordinated bond issue also to be raised under the omnibond program. The bank's other outstanding ratings have been affirmed, including its long-term foreign-currency issuer default rating at BBB-, short-term foreign-currency rating at F3, individual rating at C/D, support rating at 2, national long-term rating at AA+(ind), the national short-term rating at F1+(ind) and the foreign-currency senior unsecured notes at BBB-.

The outlook is stable.

The upper tier 2 subordinated bond is rated one notch below the bank's long-term rating to reflect its greater loss absorption features compared to more senior debt, Fitch said. The agency said it previously upgraded the bank's long-term foreign-currency issuer default rating to BBB- from BB+ to reflect the expected support from the Indian government, which the bank has enjoyed in the past and which is likely to continue, Fitch said.

The national ratings recognize government support, the agency said, but also reflect the bank's weak profitability compared with the best Indian banks.

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