S&P affirms Shinhan Card

Standard & Poor's said it affirmed its BBB+ long-term and short-term counterparty rating on Shinhan Card Co. Ltd. (BBB+/stable/A-2) and the rating on its $400 million five-year senior unsecured notes issued on May 14.

The affirmations follow May 28 news that Shinhan Card has agreed to transfer its entire business operations to LG Card Co. Ltd. The affirmation reflects the expectation that the Shinhan group will provide any necessary support to Shinhan Card during the unwinding process to avoid any default, given that the limited amount of necessary support and negative implication of any default could negatively affect the Shinhan group's reputation, S&P said. After the transfer, the ratings will be withdrawn.

The ratings reflects the strong support Shinhan Card receives from Shinhan group as a core subsidiary. It also reflects the card company's relatively stable funding structure compared with its peers, the agency said and the advantage provided by access to Shinhan Financial Group's strong client base and distribution network.

The rating also incorporates the company's relatively modest capitalization, weak market position and volatile earnings, S&P added.

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