ICRA assigns rating to Rs 50cr upper tier II bond prog of BoR

New Delhi, Sep 28 (UNI) Credit rating agency ICRA has assigned a LBBB+ rating indicating moderate credit quality to the proposed Rs 50 crore upper tier II bond programme of Bank of Rajasthan (BoR).

ICRA also has an outstanding rating of LA- rating indicating adequate credit quality to the existing Rs 70 crore Tier II bonds programme and A1 indicating highest credit quality to the Rs 15 crore Certificate of Deposits programme of BoR.

The ratings take into account BoR's strong franchise in the state of Rajasthan, its low cost deposit base, low fresh NPA generation in the last two years, improving asset quality and adequate capitalisation.

However, the rating is constrained by lower interest margin of the bank compared with peers and low core profitability indicators.

The lower rating assigned to the upper tier II bonds reflect the specific features of these instruments where in the debt servicing is additionally linked to the meeting the regulatory norms on capitalisation and reported profitability.

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