MOODY'S DOWNGRADES INDIAN BANKS' HYBRID SECURITIES

International ratings agency, Moody's, downgraded the ratings on some Indian banks' hybrid securities, in line with its revised Guidelines for Rating Bank Hybrids and Subordinated Debt. Moody's downgraded Indian banks' cumulative junior subordinated debt securities ("Upper Tier 2 Notes") as well as the perpetual non-cumulative hybrid instruments ("Hybrid Tier 1 Notes"). The rating outlook for all Indian banks affected is stable, said a press release from Moody's.


Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by the central government and Reserve Bank of India to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The banks whose instruments have been downgraded include State Bank of India, ICICI Bank, Bank of Baroda, Bank of India, Canara Bank, HDFC Bank, Union Bank of India and Axis Bank.


Source: http://www.thehindubusinessline.com/2010/01/29/stories/2010012952280600.htm