S&P rates Canara Bank notes BB

Standard & Poor's said it assigned its BBB- long-term and A-3 short-term counterparty credit ratings to Canara Bank, along with a C bank fundamental strength rating and a BB issue rating to its $250 million upper tier II subordinated notes due in 2021.

The outlook is stable.

The differential between the BBB- counterparty credit rating and the BB rating on the subordinated notes reflects the subordination and interest deferral features.

The ratings take into account the bank's strong market position in the domestic market, healthy funding and liquidity profile, the agency said, and its adequate financial profile.

However, the bank's capitalization position is weak compared with domestic peers. Further growth in its loan book will likely put increased pressure on the bank's capitalization, S&P added.

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