Ok, I got in late but had the opportunity to hear the Q&A round.... so here goes
after a little bit of ada..beep..ada..boop.. Tarun says Crisil is now more confident that govt. will infulse cash into PSU banks if need be so they are now more comfortable with the banks. and hence upgrades eight public sector banks. UBI and BOI are now AAA for Tier I, Hybrid and lower Tier II bonds. I guess the market would have (or atleast should have) thaken this into account quite some time back.
As Aside: S&P did something amazing and unbelievable
From Blooomberg:
Standard & Poor’s backtracked on ratings cuts issued last week and raised the ranking on commercial mortgage-backed debt from three bonds sold in 2007.
The securities, restored to top-ranked status, had been downgraded as recently as last week, making them ineligible for the Federal Reserve’s Term Asset-Backed Securities Loan Facility to jumpstart lending.
S&P lowered the ratings on a class of a commercial mortgage-backed bond offering from AAA to BBB-, the lowest investment-grade ranking, on July 14. The New York-based rating company reversed the cut today, S&P said in a statement. In a related report, S&P said it adjusted assumptions on the timing of projected losses on the mortgages.
“It is a stunning reversal and certainly raises questions concerning the robustness of their revised model,” said Christopher Sullivan, chief investment officer at United Nations Federal Credit Union in New York. “It may engender further uncertainty with respect to ratings outlooks.”
