Fitch Ratings has assigned India-based Bank of Baroda's (BOB) proposed US dollar-denominated senior unsecured debt an expected rating of 'BBB-(EXP)'.

The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer. They will at all times rank pari passu among themselves and with all other unsecured obligations (other than subordinated obligations) of the Issuer. The tenor of the issue is expected to be around five years and the bank plans to use all the proceeds for offshore lending activities.

The final rating is subject to the receipt of final documentation conforming to information already received.

The senior unsecured instruments are rated at the same level as the bank's Issuer Default Rating (IDR), in accordance with Fitch's criteria.

BOB's IDR (BBB-/Stable) is driven by its Support Rating Floor of 'BBB-' - which is higher than its Viability Rating of 'bb+' - and reflects Fitch's expectation that the government of India would continue to have a high propensity to extend support, should there be a need.

BOB's systemic importance is high given its position as India's second-largest state-owned bank (55.4% state shareholding as at end-March 2013), high share of system assets and deposits (around 6%) and wide-reaching pan-India presence (over 4,000 branches). BOB, along with other state banks, has also received regular capital injections from the government. Over the last three years, it has received total funds of around Rs 49.5 billion from the government and Life Insurance Corporation of India, which is wholly owned by the government and is India's largest life insurer. 

Shares of the bank declined Rs 8.7, or 1.34%, to trade at Rs 641.25. The total volume of shares traded was 61,027 at the BSE (12.53 p.m., Monday).