Jan 31, 2013
Hong Kong, January 29th 2013 - Moody's Investors Service has placed the long-term debt and deposit ratings of Korea Exchange Bank (KEB) under review for upgrade.
A full list of the ratings on review for upgrade can be found at the end of this press release.
The ratings review follows a joint announcement on 28 January 2013 by Hana Financial Group (Hana FG, unrated) and KEB that Hana FG intends to increase its stake in KEB to 100% from 60%, through a share swap. KEB shares will be exchanged with new shares in Hana FG, as of 5 April.
"We expect to upgrade KEB's A2 senior debt rating and baa2 standalone credit profile by one notch to the levels of the stronger Hana Bank, as KEB's operations would be more integrated with those of Hana Bank," says Young Il Choi, a Moody's Vice President and Senior Credit Officer.
"However, the swap could be a financial burden on Hana FG and KEB, as they will need to purchase shares from shareholders who object to the deal. We would therefore consider maintaining the ratings for KEB if such a burden becomes substantial, even though the share swap will automatically be cancelled if the purchase amount exceeds KRW1 trillion either for Hana FG or KEB," adds Choi.
The methodology used in this rating was Moody's Consolidated Global Bank Rating Methodology published in June 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
The following is a list of KEB's ratings:
All these ratings are on review for upgrade: the local and foreign currency long-term deposit of A2; foreign currency long-term senior debt of A2; foreign currency long-term senior /subordinated MTN debt of
These ratings, however, are unaffected: BFSR of C-/baseline credit assessment of baa2; and foreign currency short-term debt/deposit/commercial paper of Prime-1.
Korea Exchange Bank is headquartered in Seoul. Its consolidated assets were KRW111 trillion (USD99 billion) as of 30 September 2012.
Re-disseminated by The Asian Banker