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TEXT-Fitch Rates Korea Development Bank's Senior Unsecured USD Notes 'AA-(EXP)'
January 15, 2013 / 6:42 AM / 5 years ago

TEXT-Fitch Rates Korea Development Bank's Senior Unsecured USD Notes 'AA-(EXP)'

(The following was released by the rating agency)

SEOUL/HONG KONG, January 15 (Fitch) Fitch Ratings has assigned Korea Development Bank’s (KDB) proposed long-term senior unsecured USD-denominated notes an expected ‘AA-(EXP)’ rating. The notes will be issued under the bank’s existing USD5bn shelf programme, last updated on 26 June 2012 at the US Securities and Exchange Commission. The issue size and tenor have yet to be determined.

The proceeds will be used for KDB’s general operations, including repayment of maturing debt and other obligations. The final rating is contingent upon the receipt of final documents conforming to the information already received.

The notes are rated at the same level as KDB’s Long-Term Foreign Currency Issuer Default Rating as they will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank. The bank’s IDR is equalised with South Korea’s sovereign rating, reflecting de facto solvency guarantee by the government for KDB as per Article 44, KDB Act. As such, the rating will be directly impacted by changes in the sovereign rating.

KDB is one of the key policy banks in South Korea and 100%-owned by the government through KDB Financial Group. Although KDB has been slated for privatisation since 2008, Fitch views that it is unlikely to complete the exercise in the foreseeable future.

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