Moody's Investors Service has assigned a Prime-1 rating to the US commercial paper notes issued by Axis Bank through its $200 million fully supported commercial paper program.

The commercial paper notes will be issued through the bank's Dubai International Financial Centre (DIFC) branch.

The CP notes are issued at discount and the proceeds will be used for general corporate purposes. The maturity date on the CP notes cannot extend beyond the termination date of the letter of credit.

The Prime-1 rating on the CP notes is based primarily on an irrevocable, direct-pay letter of credit provided by Bank of America, (Aa3/Prime-1/C-), which fully supports the program.

The letter of credit provides full and timely support for the repayment of the commercial paper notes. The letter of credit is expected to terminate on October 3, 2011, unless extended pursuant to the terms on the program documents.

The Prime-1 rating of the CP notes issued through this program is highly correlated with the Prime-1 rating of Bank of America, in that a downgrade of Bank of American's Prime-1 may result in a corresponding downgrade of the CP notes.

Axis Bank Limited operates as a commercial bank and is the 10th largest bank in India with a 2.9 per cent market share, as of March 31, 2009.

Bank of America, acts as the letter of credit bank, the depositary, as well as issuing and paying agent. As the depositary, Bank of America is responsible for drawing on the letter of credit to pay maturing CP notes.-TradeArabia News Service